61–70 of 95 posts
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Cutting 1/3 of discretionary non-military spending is extreme. (edited for typo)
They want the levels set to the 2022 levels. The idea that they increased by 1/3 in one budgetary cycle is bonkers.
And any increases were across the board. Asking them to cut all of the increases from only ~10% of the expenditures is ludicrous.
The 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…
Right! This article very misleadingly confuses leaving the Bretton wood agreement and going off the gold standard as defaults. I think that is the same only in the mind of this author, who seems to be trying to normalize something that would be very dumb to do.
Note that the debt ceiling does not limit deficits. Those come from the budget. So Congress and the President can approve a budget that will cause debt to go above the debt ceiling, the government can then contract for goods and services authorized under that budget, and then when later presented with the bills for those goods and services run into the debt ceiling.
There's no perfect analogy between government finance and person finance, but reasonably close is this. You and 5 friends buy a vacation house together. You have a contract you have all agreed to covering how to run this thing. One of your group is designated as the treasurer, and this rotates yearly among you.
You have a planning meeting every year where you vote on major upgrades and improvements for the next year. These are put on a credit card that is jointly owned by you and your friends. Also on that credit card are utility bills, taxes, mortgage payments, and anything else that can be classified as a vacation house expense.
When the credit card bill comes each month, there is a meeting where it is presented. If it is under a certain amount the group contract authorizes the treasurer to pay it from the group's joint bank account, which you all pay a fixed monthly amount into.
If the bill is over that fixed amount, which it will be the month after a major upgrade or improvement is done, the treasurer can only pay it if the group votes to do so.
One year at the annual planning meeting the group voted unanimously to reroof the house. It votes 5-1 against proposals to install a hot tub, remodel a bathroom, and build a new deck. Those proposals were from 3 different people.
After the reroofing is done and appears on the credit card bill the 3 people whose proposals were voted down at the planning meeting vote "no" on paying the credit card bill. They say they are going to vote "no" unless the group agrees to their upgrade proposals. They are all adamant about this (even though each of them is against the other two's upgrades), and so the treasurer cannot get a group vote in favor of paying the credit card bill.
The sane way to do this is that when the spending is authorized at the planning meeting for that to also authorize paying the bill when it comes do.
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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…
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China has been buying gold. They have been preparing for the collapse of the dollar for years. There are some claims that the collapse of the dollar is China's goal.
Allegedly they have some 2068 tons. For an economy of their size, this isn't that much. Italy claims 2452 tons. https://www.gold.org/goldhub/gold-focus/2023/04/chinas-gold-... . I'm more in the Brent Johnson camp on the de-dollarization hype.
China also has extensive gold mining operations in Africa and South America. I doubt the quantity of mined gold is counted in numbers based on market purchases.
https://oilprice.com/Metals/Gold/Reopening-Of-Chinese-Econom...
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We have a budget process. If they fail to pass a budget, we get a government shutdown. Shutdowns are already extreme, but at least they are well understood and incremental. A 1 day shutdown is not too bad. A 1 year shutdown is untenable. Why do they need more leverage?
I answered that in my second paragraph. They've proven they're incapable of developing a budget that doesn't balloon. Non-discretionary spending is through the roof, as evidenced by their demand of latching spending to the 2022 budget levels. That's last year. How is this extreme or outside the realm of even negotiation?
Earlier quoted context omitted.
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…
This is very weird argument that smells of taking russian propaganda on face value. There's no "geographical barrier" other than what, hundreds of kilometers of land? They don't need "forward position". Closest point from Ukraine to Moscow is barely less than from Latvia, and St Pete is pretty much on NATO border, yet somehow... land road to Crimea makes them feel "secure"?
The real answer is that there is no "feeling insecure" at all other than in propaganda, and invasion of Ukraine is purely for maintaining the empire. There can be no "russian world" country that is outside of russia and prospers.
The 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.
An open question, nobody really knows. As I recall, the president has no option that isn't technically a constitutional violation. We might want to throw this to the SCOTUS and settle it.
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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…
You're trying to pretend that causality goes the wrong way around. The invasion of Ukraine caused the asset seizures.
Earlier quoted context omitted.
They want the levels set to the 2022 levels. The idea that they increased by 1/3 in one budgetary cycle is bonkers.
Huh? 2020 budget was $6.5T. 2021 was $7.3T. 2022 was $6T. 2023 is $6T. Considering inflation, spending is down ~10%. And any increases were across the board. Asking them to cut all of the increases from only ~10% of the expenditures is ludicrous.