141–150 of 251 posts
I guess the thinking goes that we can it's easier to renegotiate social security and medicare benefits than to renegotiate the interest payments on a bond. Not sure that's true -- it seems like inflation is the only reasonable solution to either of those problems.
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There is 70M of Boomers in US. (Generally) about to end a decade or two of their most productive years: highest skills, highest level jobs, house paid off, kids out, etc. - trying to save and invest enough to give themselves a good retirement. Just yesterday I was listening to some YT podcast and boomers own ~74% of all US economical activity. Many of them accepted low salaries, for the promise of pensions and so on.…
The aggregate amount of savings by a generation is almost entirely irrelevant to the aggregate material conditions that generation has in retirement. They're not canning food and stashing it in their basement like a squirrel, they're generally simply acquiring financial claims on future productivity. And this is exactly what a bubble is - higher prices on financial assets, which means more assets per real dollar of f…
Exactly. Deflation (financial asset cost inflation) now, for inflation (financial asset cost deflation) later, right?
> Current misspending doesn't particularly impact future retirees.
I agree with everything, except this part. Have we used all this surplus productivity to actually increase future productivity (invented some life changing gene therapy, cheaper transportation methods, better medical treatments, and so forth) and government used that debt to increase productivity as well (better infrastructure etc.), the quality of life would improve for everyone (including retirees), making the society as a whole spend more of their productivity voluntarily giving back more to the investments boomers bought with their savings.
It didn't have to be a bubble if it delivered the value. The future inflation and capital reallocation from society to the retired could have been offseted by an increase in productivity, keeping everone's quality of life raise, or at lest not fall.
But obviously, you can't pull ground breaking discoveries and great bussinesess out of the hat, and make government more efficient, just because there is more money to be invested. Quite the opposite. Surplus was mostly wasted and reallocation will have to come at the cost of the quality of life.
It seems like the whole financial system depends on the time delay between people agreeing to get a certain salary/price and then actually getting paid and spending it. By the time they actually get paid, the money is actually worth less than what they had originally agreed to. It seems that large corporations should be able to make a profit on that delay alone, even if they produce nothing of actual value. I guess i…
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> it misses the obligation to pay the principal But you never really have to do that. You can just keep rolling them. If we could keep the debt at the same absolute level inflation and productivity increases would drive it into insignificance. Of course the idea of keeping it at the same level is a fantasy.
I wonder how people reconcile how it's OK to rely on progress to grow our way out of a debt burden but also incredibly irresponsible to expect progress to cope with our carbon problem. Both seem defensible to me but like they kind of need an adaptor to fit in the same worldview.
If the USA falls into a debt crisis the result will be global economic disruption.
If the world falls into runaway climate change the result will be the extinction of the human race and possibly all life on earth.
Personally I'm more comfortable with the possibility of the first than of the second.
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As opposed to the Republican platform of spending more money while cutting tax revenue?
What do Republicans advertise they are going to spend money on? I'm only familiar with Democrats calling for free health care, free college, universal basic income, etc.
https://www.ft.com/content/9ce05a54-c424-11e9-a8e9-296ca6651...
Like the housing bubble, our debt hasn't been a problem and it's not going to be a problem right up until it is a problem. It will be a black swan event and afterward everyone will claim that they saw it coming and "the other guy" ignored it.
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As opposed to the Republican platform of spending more money while cutting tax revenue?
What do Republicans advertise they are going to spend money on? I'm only familiar with Democrats calling for free health care, free college, universal basic income, etc.
Low rates are a result of boomeres all over the world saving for retirement (+ CB manipulation). As soon as they start using that savings, instead of accumulating them both inflation and yields will tend to naturally raise again. More people to care for, less people to do the work -> inflation. Inflation expectation -> higher yields. That $175T wealth figure is measured at the peak of everything bubble in the US. Rea…
Inflation is basically necessary at this point in order to collapse the various asset bubbles without causing a mass default spiral on the debt issued to finance it. The housing crisis is a good portion of this; we cannot build our way out of housing without putting homeowners underwater on their mortgages en masse, and young people cannot tolerate the current trends of housing prices near areas of economic opportuni…
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In the mean time, are us Americans ever going to get a president that focuses on paying down the debt? How much would taxes have to go up (because spending can't go down, right?) for citizens to contribute their fair share of paying down the debt?
> How much would taxes have to go up (because spending can't go down, right?) for citizens to contribute their fair share of paying down the debt? this seems like a weird statement. what is "fair share"? i am a middle class person with a job with fantastic benefits, yet i easily pay over 30% in taxes (probably closer to 40% if one really counts all the "hidden" taxes) and still have to put up with shit infrastructure…
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> that the government can create for "free" One of the very smart things the U.S. has done is take a good portion of those printed dollars and invest in weapons which allow us to force the world to accept the same printed dollars. That's what really allows our government to be in that globally unique position. Resistance to this by other nations has various consequences. If you're a country that doesn't have a certai…
That's not really accurate either. Switzerland and Japan aren't out there regime changing countries but their currencies are valued. The dollar is valued because the US is the largest economy and has a history of sound monetary policy.
