Can we just remove the "debt ceiling" completely this time instead of pretending to adhere to it?
The four times the United States government defaulted on its debt (2021)
21–30 of 95 posts
Re: The four times the United States government defaulted on its debt (2021)
#22The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…
> The US Government has never defaulted on its debt under the current (~75 year old) global financial system. > It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. If moving off of Breton Woods was a default, then your first statement is wrong, and the US hasn't defaulted on its debt in 50 years : https://en.wikipedia.org/wiki/Bretton_Wood…
This is economics the numbers are made up anyway
(Changed it)
Re: The four times the United States government defaulted on its debt (2021)
#23The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…
> ... when the world moved off Breton Woods ... When Nixon decided to end Bretton Woods.
“…when the world moved past the Kennedy Administration…”
Re: The four times the United States government defaulted on its debt (2021)
#24I was an international grad student in 2018-19 when there was a shutdown. It was fascinating.
My wife was working in transportation consultancy and there was a sudden drop in the amount of work.
The national parks were free to go in an out, so we decided to go to the death valley. I saw the biggest pile of trash ever inside a park.
Re: The four times the United States government defaulted on its debt (2021)
#25> The fourth default was the 1971 breaking of the U.S. government’s commitment to redeem dollars held by foreign governments for gold under the Bretton Woods Agreement. Bretton Woods is a fascinating topic on its own. Accidental Superpower is a good read that dives in a little, but isn't focused specifically on it. I can't resist bringing up that book because in one of the later chapters, it predicted the invasion of…
The conflict has been going on since 2014. I'm interested in what was actually predicted.
It's an interesting book and I think it's worth a read.
The author, Peter Zeihan, does a good job of melding geography, demographics, energy, and food supply to come up with a deterministic approach to geo-politics.
I have no clue how accurate it is, but it's a fun mental algorithm for simplifying complex and nuanced situations.
His prediction, and I'm paraphrasing here, was that Russian Demographics are more or less in free fall. Every year after ~2020 the Russians have less and less fighting age men and their army will be weaker and weaker.
Additionally, because most of populated Russia is a flat plane, they have no geographic barriers to protect their cities. Therefore they need to forward position their troops in order to feel secure.
So his assertion, was that based on previous Russian military conflicts, Ukraine was the next most likely target, and that if Russia wanted to do anything, they'd have to do something sometime earlier on in this decade. Otherwise they can't field an army of significant size to forward position their troops.
Re: The four times the United States government defaulted on its debt (2021)
#26The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…
Is it (a US default) at all possible given all we know? and if yes, is it possible to envision what would happen specifically? If it will have global repercussions then maybe it is something the global community should insure against, somehow?
These are questions I'd like to have have a grip on. Not an economist, obviously.
Re: The four times the United States government defaulted on its debt (2021)
#27The US defaulting isn't really the most interesting topic at this point - scenarios where it honours its debts became implausible a while ago. It'd be much more interesting to get an honest insight into the views of the Chinese & Japanese leadership (two countries with the largest US dollar holdings) on what they think they are getting out of this. The numbers are obvious - someone isn't going to be getting much in t…
No better alternative for the Chinese. US Treasuries are the worlds most liquid and deep markets for money at the nation-state scale. Euro's are still in America's sphere of influence. Holding Yuan just destroys their export economy. Japanese depend on America for security so they do it as a sort of quid pro quo. I do agree though: pensioners (i.e. US public) will suffer first. International treasury defaults would t…
The Asians have potentially just given huge amounts of real stuff to the US in exchange for ... arguably the exposure? They could have just taken the day off instead and been economically in the same position. "No better alternative" is a bit of a trick in assuming that the natural order of the world is Asians slaving away making life better for someone foreign. It didn't have to be that way.
I'm not saying that they've certainly made a mistake, but "no better alternative" is unimaginative. This is China and Japan we're talking about here, they absolutely had the power to make their own alternatives. Will they be surprised if the US doesn't pay them? The Russians saw it coming, they were doing exercises and whatnot years in advance of the asset seizures.
Re: The four times the United States government defaulted on its debt (2021)
#28The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…
> ... when the world moved off Breton Woods ... When Nixon decided to end Bretton Woods.
When Nixon stole gold from other countries by breaking an international treaty. The US is lucky no country declared war over the thievery.
Re: The four times the United States government defaulted on its debt (2021)
#29The US defaulting isn't really the most interesting topic at this point - scenarios where it honours its debts became implausible a while ago. It'd be much more interesting to get an honest insight into the views of the Chinese & Japanese leadership (two countries with the largest US dollar holdings) on what they think they are getting out of this. The numbers are obvious - someone isn't going to be getting much in t…
> scenarios where it honours its debts became implausible a while ago
Do you mean this debt ceiling cycle or in general?
Re: The four times the United States government defaulted on its debt (2021)
#30The US Government has never defaulted on its debt under the current (~50 year old) global financial system. It HAS defaulted when transitioning off the gold/silver standard, when the world moved off Breton Woods, and during the Civil War. I’d note that each of those defaults were related to the total collapse of the existing rules for national/global finance. So ultimately, these defaults do bolster the case for the…
Perhaps history shows that "literally bring[ing] an end to the current global financial system" is not as uncommon as people expect.
But doing so when you are at the top of said system; for no reason other than politcal gamesmanship?