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Will America's debt doom us?

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Re: Will America's debt doom us?

#171

Post by esoterica »

big_chungus wrote: post #143
cryptica wrote: post #113

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…

Our government does the same thing. "Tax witholding" means that I lose out many months of arbitrage. I could have invested that money, saved it an gotten interest, done any number of things. Tax day is once a year; no one ought to pay before then. It's a nasty trick to hide just how much people are paying from those who can't afford fancy financial advisors.

Why do you think you are entitled to not pay a cent before tax day?

Re: Will America's debt doom us?

#172

Post by [deleted] »

wang_li wrote: post #104
opportune wrote: post #88

Earlier quoted context omitted.

Why is this supposed to be surprising or relevant?

It's a surprise to plenty of people who think that their $70,000/yr income makes them a net tax payer when it actually doesn't. And it's relevant because people will reduce their marginal income, or relocate to more favorable tax jurisdictions, when the tax burden of that income is excessive. It's also relevant because, at a certain point, the productive portion of the population will fall below that necessary to mak…

[deleted]

Re: Will America's debt doom us?

#173

Post by dusrus »

For most households bankruptcy happens slowly, then quickly. I think we need to be more mindful of our debt. Most people I talk to are like, "It's not a problem yet." Which implies we will deal with it when it is a problem... which is dumb.

Re: Will America's debt doom us?

#174

Post by aNoob7000 »

samsonradu wrote: post #167
tehabe wrote: post #163

Earlier quoted context omitted.

The problem is, state debt is not like personal or corparate debt. If you cut your spending to pay of a loan, it is usually not a problem. If the state cut its spending to pay back a loan, it means people have to spent more money on another spot to make up for the budget cuts. We see this currently in Germany, the German government is proud of their budget but at the same time the infrastructure is crumbling, trains…

German infrastructure is top-class, trains work quite well and bridges are not collapsing. May I ask where you got this from? EDIT Please don't turn this into a flame war. I am slightly worried about the effects of mainstream media, as I've seen these kind of posts on Reddit also. People keep hearing about the low/inexistent economic growth of countries like Germany or Japan and start thinking that these countries ar…

LOL - He's talking about the USA.

Re: Will America's debt doom us?

#175

Post by marcosdumay »

electricviolet wrote: post #144
abecedarius wrote: post #134

Earlier quoted context omitted.

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.

Maybe it's because of the difference in what's at stake: 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.

There may not be much difference. Extinction of the human race is an exaggerated prediction, but more importantly, what do you expect the consequences of global economic disruption (to the level of taking the US down) to be? Take a look at history if you may.

Re: Will America's debt doom us?

#176

Post by jaypeg25 »

samsonradu wrote: post #167
tehabe wrote: post #163

Earlier quoted context omitted.

The problem is, state debt is not like personal or corparate debt. If you cut your spending to pay of a loan, it is usually not a problem. If the state cut its spending to pay back a loan, it means people have to spent more money on another spot to make up for the budget cuts. We see this currently in Germany, the German government is proud of their budget but at the same time the infrastructure is crumbling, trains…

German infrastructure is top-class, trains work quite well and bridges are not collapsing. May I ask where you got this from? EDIT Please don't turn this into a flame war. I am slightly worried about the effects of mainstream media, as I've seen these kind of posts on Reddit also. People keep hearing about the low/inexistent economic growth of countries like Germany or Japan and start thinking that these countries ar…

Especially compared to America, which has awful infrastructure...

Re: Will America's debt doom us?

#177

Post by marcosdumay »

treis wrote: post #94
JohnFen wrote: post #82

Earlier quoted context omitted.

> It's denominated in dollars that the government can create for "free". The government cannot create wealth "for free". It can print more dollars, but in doing so it makes each dollar worth less. No wealth is actually gained. > there are knock on effects of creating enough dollars to zero out the debt Doing that is impossible, though. Reducing the value of a dollar means that you'll need even more dollars to repay t…

>The government cannot create wealth "for free". It can print more dollars, but in doing so it makes each dollar worth less. No wealth is actually gained. That's the point. The government isn't on the hook for wealth. They are on the hook for dollars. And dollars, to the US government, are "free". >Doing that is impossible, though. Reducing the value of a dollar means that you'll need even more dollars to repay that…

> The amount of debt doesn't go up if the value of the dollar goes down.

The interest rate goes up almost instantly when the government prints money. That's not exactly equivalent to increasing the debt value, but it's more than enough to make the "just inflate it away" strategy fail 100% of the times some country tries it.

Re: Will America's debt doom us?

#178

Post by dustingetz »

theflyinghorse wrote: post #60
dustingetz wrote: post #20

Earlier quoted context omitted.

The book "Looting Greece" by progressive economist Jack Rasmus explains in technical detail the "twin deficit" strategy budget deficit is balanced by trade deficit, which hints at why USA has aircraft carriers stationed around the world, projecting power that tilts the free markets in its favor which is what makes this strategy work. Here is an excerpt: http://www.dustingetz.com/:rasmus-usa-twin-deficit/

I don't understand why US having military presence around the globe tilts the free markets in their favour. Realistically, no military outside of perhaps Russian could stand up against the US but I don't think US are outright forcing trade agreements at a gun point, or am I wrong?

Sometimes you can just ask someone what their motivations are and they simply tell you:

Summary of the 2018 National Defense Strategy of the USA https://dod.defense.gov/Portals/1/Documents/pubs/2018-Nation... (11 pages, easy read)

First page: "Failure to meet our defense objectives will result in decreasing U.S. global influence, eroding cohesion among allies and partners, and reduced access to markets that will contribute to a decline in our prosperity and standard of living"

I'll leave it to the reader to decide if this supports the above argument, it's just USA propaganda but I found it certainly interesting to read with a cynical eye.

Re: Will America's debt doom us?

#179

Post by tehabe »

samsonradu wrote: post #167
tehabe wrote: post #163

Earlier quoted context omitted.

The problem is, state debt is not like personal or corparate debt. If you cut your spending to pay of a loan, it is usually not a problem. If the state cut its spending to pay back a loan, it means people have to spent more money on another spot to make up for the budget cuts. We see this currently in Germany, the German government is proud of their budget but at the same time the infrastructure is crumbling, trains…

German infrastructure is top-class, trains work quite well and bridges are not collapsing. May I ask where you got this from? EDIT Please don't turn this into a flame war. I am slightly worried about the effects of mainstream media, as I've seen these kind of posts on Reddit also. People keep hearing about the low/inexistent economic growth of countries like Germany or Japan and start thinking that these countries ar…

I wish it were top-class, but it isn't. many bridges have structural issues and in need to be replaced or repaired and due to the fact that the DB Netz who runs the railway network has to pay for small repairs but the state pays for big ones, you can see how it is not well maintained.

Here are some more information in German though: https://www.deutschlandfunk.de/autobahnbruecken-in-deutschla... https://www.dw.com/de/bahnfahren-auf-verschleiß/a-46623921

Re: Will America's debt doom us?

#180

Post by bin0 »

esoterica wrote: post #171
big_chungus wrote: post #143

Earlier quoted context omitted.

Our government does the same thing. "Tax witholding" means that I lose out many months of arbitrage. I could have invested that money, saved it an gotten interest, done any number of things. Tax day is once a year; no one ought to pay before then. It's a nasty trick to hide just how much people are paying from those who can't afford fancy financial advisors.

Why do you think you are entitled to not pay a cent before tax day?

It's my money, why do you think the gov't should get it early? You're coming at this from the wrong perspective.
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