The Chinese Government Likely Borrowed More than the US in 2017 • Hacker News Board

Re: The Chinese Government Likely Borrowed More than the US in 2017

#91

Post by swfsql » Mon, Jul 16, 2018, 3:30 PM UTC

rdlecler1 wrote: post #60

Bucephalus355 wrote: post #3

And this is the deficit we know about. In reality it could be much larger, something like 1000% of GDP. The situation is the same with China’s military budget. In reality it’s probably 2x or 3x larger than the official numbers we have.

Certainly they’re getting 2x - 3x more per dollar they spend both because of intrinsic lower costs but also IP theft.

IP shouldn't exist, and it hampers capitalism: https://www.youtube.com/watch?v=NAvbWeivv8o

This is one of China's advantages btw, the US should abolish IP to get more competitive.

Re: The Chinese Government Likely Borrowed More than the US in 2017

#92

Post by RobertoG » Mon, Jul 16, 2018, 3:32 PM UTC

ChrisLomont wrote: post #86

zajd wrote: post #81

Earlier quoted context omitted.

> China is still a developing nation. > That means that China can invest in infrastructure (roads, trains, airports, education) which have high real return making the increase in debt much less of a problem. What does that have to do with being a developing nation? The US could do the same.

Adding infrastructure has a higher rate of return when there is less infrastructure to begin with. Adding one interstate highway system greatly increased US economic mobility. Adding a second would not have such benefit. So China, not having the infrastructure the US does, likely gets a benefit on doing projects that would be a loss in the US.

So, the reason because the US doesn't invest in infrastructure is because the ROI is not high enough?

Re: The Chinese Government Likely Borrowed More than the US in 2017

#93

Post by KaoruAoiShiho » Mon, Jul 16, 2018, 3:36 PM UTC

ITT: Nobody knows what they're talking about.

People need to stop assuming all governments work identically and that numbers are comparable in any way. In China local governments COLLECTS NO TAXES, thus they fund all their expenditures by debt. In 2 years there's going to be widespread tax reform and all this debt will be wiped away.

Re: The Chinese Government Likely Borrowed More than the US in 2017

#94

Post by zajd » Mon, Jul 16, 2018, 3:41 PM UTC

ChrisLomont wrote: post #86

zajd wrote: post #81

Earlier quoted context omitted.

> China is still a developing nation. > That means that China can invest in infrastructure (roads, trains, airports, education) which have high real return making the increase in debt much less of a problem. What does that have to do with being a developing nation? The US could do the same.

Adding infrastructure has a higher rate of return when there is less infrastructure to begin with. Adding one interstate highway system greatly increased US economic mobility. Adding a second would not have such benefit. So China, not having the infrastructure the US does, likely gets a benefit on doing projects that would be a loss in the US.

What about the things that China has that we don't? Like high speed rail networks? Or things we both don't have, like university that doesn't cost an arm and a leg to attend?

Re: The Chinese Government Likely Borrowed More than the US in 2017

#95

Post by moorhosj » Mon, Jul 16, 2018, 3:42 PM UTC

ihsw2 wrote: post #53

chvid wrote: post #18

China is still a developing nation. That means that China can invest in infrastructure (roads, trains, airports, education) which have high real return making the increase in debt much less of a problem. This is also the reason why China has grown persistently 7-10% over the past two decades compared to USA which have grown 2-3% in the same period. Per person China's GDP is less than a fifth of the US hinting that th…

Using per person GDP when discussing China is a cruel joke. Like most usages of per person GDP in any country, it glosses over regional disparities and (more importantly) economic equality measures like Gini coefficient. Taking Gini coefficient into consideration, China still has a long way to go.

==Taking Gini coefficient into consideration, China still has a long way to go.==

So does the US [1]: The top 1 percent of earners in America now take home about 20 percent of the country’s pretax national income, compared with less than 12 percent in 1978, according to the research the economists published at the National Bureau of Economic Research. Over the same time in China, the top 1 percent doubled their share of income, rising from about 6 percent to 12 percent.

[1] https://www.cbsnews.com/news/usa-china-income-inequality-eco...

Re: The Chinese Government Likely Borrowed More than the US in 2017

#96

Post by seanmcdirmid » Mon, Jul 16, 2018, 3:44 PM UTC

ythn wrote: post #78

woah wrote: post #72

Earlier quoted context omitted.

If the US decide to spend trillions building skyscrapers its cities, then housing might be affordable

Housing in Alaska already is affordable...

Not really. Alaska is damn expensive if you are used to lower 48 prices.

That sky scraper in question was built for a small seaside village limited by land because they were stuck between a mountain and water. It was really a one off and I don’t think it contributed much to USA debt.

Re: The Chinese Government Likely Borrowed More than the US in 2017

#97

Post by socrates1998 » Mon, Jul 16, 2018, 3:47 PM UTC

China, like all other indebted nations, will seem very stable and then it will collapse in a fury.

Could happen in a year or 10 years, it's very hard to predict these things.

China's solution has always been to growth itself out of problems.

At some point, that becomes impossible.

Re: The Chinese Government Likely Borrowed More than the US in 2017

#98

Post by seanmcdirmid » Mon, Jul 16, 2018, 3:47 PM UTC

ggm wrote: post #87

microdrum wrote: post #79

Earlier quoted context omitted.

They are literally manufacturing islands in the ocean.

Cheaply btw. Pumping sand is not hard. And, they're doing it on existing reef structures. The sand only lasts because there is an anchor there. This is not primarily military budget, any more than the US army corps of construction is military budget when it builds dams and Levees in the USA mainland (which btw, it does, a lot) Military budget is materiel. Sand, even runways, is not Materiel.

The only purpose for building those islands out is militarily. If it’s not coming out of the PLAN budget directly, I would be very surprised.

Re: The Chinese Government Likely Borrowed More than the US in 2017

#99

Post by icebraining » Mon, Jul 16, 2018, 3:49 PM UTC

KaoruAoiShiho wrote: post #93

ITT: Nobody knows what they're talking about. People need to stop assuming all governments work identically and that numbers are comparable in any way. In China local governments COLLECTS NO TAXES, thus they fund all their expenditures by debt. In 2 years there's going to be widespread tax reform and all this debt will be wiped away.

Who lends money to a local government which has no revenue?

Re: The Chinese Government Likely Borrowed More than the US in 2017

#100

Post by seanmcdirmid » Mon, Jul 16, 2018, 3:50 PM UTC

endorphone wrote: post #89

vonmoltke wrote: post #46

Earlier quoted context omitted.

Government debt, much like large corporate debt, almost always takes the form of bond issues. By definition, to raise debt capital via a bond issue someone needs to buy those bonds. Buying bonds is buying debt. Thus, governments cannot raise money through debt issues if people are unwilling to buy the debt.

Over half of US debt is held by Federal retirement funds -- e.g. Social Security. So you put that money away for your retirement, and that retirement fund automatically buys close to no return t-bills. It's all really a giant pyramid scheme, and is only tenable with unsustainable population growth. The US can run an enormous deficit for as long as they can convince the population that their retirement funds should pa…

It’s more like the other way around: the USA must run large deficits so that massive retirement savings have somewhere to go. Money can’t be saved without being lent. The only question is whether retirement savings are better invested with the us government or more privately like in a 401K (this is what Bush 43 wanted to do with his SS reform).

Supply is just as important as demand when looking at debt.