Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Just the Facts: S&P's $2 Trillion Mistake

treasury.gov

Post reply on HN
Print view View original

181–190 of 242 posts

Re: Just the Facts: S&P's $2 Trillion Mistake

#181

Post by mahyarm »

Maascamp wrote: post #120
alnayyir wrote: post #117

Earlier quoted context omitted.

Our tax burdens are not the lowest by any means. My total tax rate partially due to living in California (although it is mostly Federal) is ~40%. There are plenty of countries in Europe that would be happy to tax me less. My buddy in Singapore pays about 8% all told and he's in the same income range. The temptation to become an expat gets stronger as I earn more money. My sin is not being a fat cat living off capital…

Singapore's not quite the oasis you make it out to be. Have a look at how much it will cost you for a car once you get over there.

You really don't need a car in singapore. It's one city, and you can fly everywhere in SE asia for $50-$200 round trip with AirAsia.

Re: Just the Facts: S&P's $2 Trillion Mistake

#182

Post by mkr-hn »

CamperBob wrote: post #175
mkr-hn wrote: post #30

Earlier quoted context omitted.

Then a financial crisis hits and the government finds itself unable to react to the needs of a paralyzed market. It's a nice idea in principle. But any time something like this or a balanced budget law/rule comes up in congress, it never has a provision for reacting to emergencies.

The problem with that is, as we've seen (and are seeing), it's trivial to manufacture an 'emergency' or a 'crisis' on demand, whenever it's convenient.

A government that can react to real crises while being vulnerable to fake ones is the best option I've seen so far. People are very creative when it comes to working around problems. Some people see data processing efficiency as a problem to solve. Others see finding ways to manipulate government for profit as one.

Re: Just the Facts: S&P's $2 Trillion Mistake

#183

Post by CWuestefeld »

bubbleRefuge wrote: post #179
CWuestefeld wrote: post #48

Earlier quoted context omitted.

Sure, if you choose to look at it that way. But if you're going to make "Non-convertible floating FX currency regimes (ie fiat money) ... can meet any and all financial obligations by issuing currency", then you've got to consider that entire reference frame. Issuing currency is identically equal to inflation, which is itself nothing more than a tax levied against those holding assets denominated in that currency. Us…

Issuing currency is identically equal to inflation No. There is demand pull inflation and cost push inflation. If you remember from econ, inflation or price level is the intersection of supply and demand curves. Since demand and supply are not constant, it is possible to issue greater amounts of currency in the face of greater amounts of supply and still see prices decline if the increase in supply outweighs the incr…

inflation or price level is the intersection of supply and demand curves

As I understand your claim, you seem to be regarding the entire market as a single monolithic commodity -- a common Keynesian error.

Sure, the prices of discrete commodities fluctuate as their quantities supplied and demanded fluctuate. That's not at all the same thing as devaluation of the currency due to increase in the money supply.

That said, there's a good deal of controversy over the effect of wages (whose price tends to be sticky, preventing "proper" adjustment for supply/demand). Thus, even Austrians think that a moderate level of inflation is good, because it acts as a hidden throttle on the effect of wage increases.

Re: Just the Facts: S&P's $2 Trillion Mistake

#184

Post by cooldeal »

katovatzschyn wrote: post #126

From Naomi Klein's The Shock Doctrine: In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in the national newspaper, the Globe and Mail. A major national television special reported that “economists are predicting that sometime in the next year, maybe two years, the dep…

http://en.wikipedia.org/wiki/Starve_the_beast

Re: Just the Facts: S&P's $2 Trillion Mistake

#186

Post by zr52002 »

robryan wrote: post #178
lurker19 wrote: post #136

Earlier quoted context omitted.

Simply false. If interest payments can be made sustainably, there is no default.

At some point though you have to balance the budget or they won't be sustainable.

Nope, don't even have to go that far. So long as interest payments as a fraction of tax revenue doesn't increase, debt is sustainable. You can raise tax revenue either directly or by growing the whole economy, so the taxes are the same percentage, but coming out of a larger number.

It's no different than personal finance. If I get a raise and my income goes up by 10% and get a fancier apartment for 5% more, I'm still better off overall because my salary grew at a faster rate than my rent.

Re: Just the Facts: S&P's $2 Trillion Mistake

#187

Post by flurie »

j_baker wrote: post #65
bahman2000 wrote: post #14

I continue to be amazed at how much credibility we seem to give this (and other) rating agency after they rated subprime-backed derivatives as safe, rated AIG & Lehman as safe. Is our collective short-term memory non-existent?

A broken clock is right twice a day. I hate the ratings agencies, but that doesn't make the downgrade wrong .

A track record is important in determining credibility. Their long term (decades) track record may be fine, but their short term (past few years) track record is suspect. This may be legitimate and above board, but it is difficult, and with good reason, to believe that this is so.

Re: Just the Facts: S&P's $2 Trillion Mistake

#188

Post by lucisferre »

jerf wrote: post #104
lucisferre wrote: post #100

Earlier quoted context omitted.

Hate to just post a +1, me too, but this, it seems, just isn't be said or recognized enough. The US, with one of the lowest tax burdens in the western world ( the lowest?) can easily afford to pay down it's debts but without any support for raising taxes in the slightest, not just amongst republicans but from what it seems are a vocal and loud minority (majority?) of Americans, no one can really act surprised by S&P'…

It isn't our current debts that have people concerned. It's the combination of current debts and unsustainable future obligations, which are so large that they in fact can't be paid down by just raising taxes. Barring an adjustment in what they are, they grow to the point that they eventually consume 100% of the economy in something like 40 years in conjunction with interest payments, but of course they become comple…

No doubt, I'm definitely not suggesting it can be done without some cuts, just that cuts alone are not likely to suffice.

Re: Just the Facts: S&P's $2 Trillion Mistake

#189

Post by redthrowaway »

algoshift wrote: post #171
redthrowaway wrote: post #131

Earlier quoted context omitted.

Please don't SHOUT; use apostrophes for emphasis.

Oh, please...

>Please don't use uppercase for emphasis. If you want to emphasize a word or phrase, put asterisks around it and it will get italicized.

http://ycombinator.com/newsguidelines.html

EDIT: Grandparent should read "use asterisks for empahsis". Sorry for the brainfart.

Re: Just the Facts: S&P's $2 Trillion Mistake

#190

Post by robryan »

zr52002 wrote: post #186
robryan wrote: post #178

Earlier quoted context omitted.

At some point though you have to balance the budget or they won't be sustainable.

Nope, don't even have to go that far. So long as interest payments as a fraction of tax revenue doesn't increase, debt is sustainable. You can raise tax revenue either directly or by growing the whole economy, so the taxes are the same percentage, but coming out of a larger number. It's no different than personal finance. If I get a raise and my income goes up by 10% and get a fancier apartment for 5% more, I'm still…

True, as I understand it though they still have a fair bit to go to bring it to a sustainable level in that sense.
Post reply on HN