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US national debt reaches a record $37T, the Treasury Department reports

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Re: US national debt reaches a record $37T, the Treasury Department reports

#81

Post by Terr_ »

secabeen wrote: post #20
emchammer wrote: post #18

Earlier quoted context omitted.

It looks like it was under control for a while following World War II, but then from the early 1980s, it's hard for me not correlate the first derivative of the slope of that graph with presidential party.

What do you specifically see? I see two big increases in debt, both due to shocks (the 08 financial crisis, and the pandemic; one under Obama, and one under Trump.). Pre 2008, it does look like moderate increases under Reagan/Bush1 and Bush 2, and flat to decrease under Clinton, is that what you mean?

> I see two big increases in debt

I recommend the surplus/deficit by GDP graph, which is easier than manually eyeballing slopes: https://fred.stlouisfed.org/series/FYFSGDA188S

Re: US national debt reaches a record $37T, the Treasury Department reports

#82

Post by dh2022 »

2OEH8eoCRo0 wrote: post #19

How do you guys see this ending? I don't see this ending well but I can't imagine what happens. Seems unsustainable but nobody wants to deal with it.

I think between 5-10 years US will run into a deficit spiral: US will not be able to control its deficit. When that time comes make sure you will not need any additional credit and you have enough savings for 6 months to a year of expenses.

In the shorter term I predict that next summer Trump will replace Jerome Powell with someone else who will bring short term interest rates to close to 0%. This will allow the US admin to decrease the interest expense on its debt, and use these savings to further increase the deficit. The problem thus magnified will then be dumped onto the next US admin-which will be mocked by MAGA as incompetent (something along the lines of “we gave these guys a perfect economy and they wrecked it”)

Re: US national debt reaches a record $37T, the Treasury Department reports

#83

Post by Terr_ »

dragonwriter wrote: post #66
etchalon wrote: post #52

Earlier quoted context omitted.

The 2008 crisis happened under Bush, not Obama. Obama was inaugurated on January 20th, 2009.

Not only was Obama not inaugurated until 2009, but the Great Recession began in 2007, so tying it to Obama because it is popularly associated with 2008 and Obama was elected towards the end of that year is...doubly wrong.

I'm also certain some folks believe Biden was President during the start of COVID-19 in the US too. (Jan 2020.)

It seems to be a pattern, where a disturbingly-large minority of people remember nothing but the year-number of an election (e.g. "2008") and never account for how voting was at the end of that year and the voting-result only takes effect the next (odd-numbered) year.

Oh, there's also a general "I want it to be true so I remember it that way" aspect, but I think that's contributory rather than the main cause.

Re: US national debt reaches a record $37T, the Treasury Department reports

#84

Post by jbm »

OgsyedIE wrote: post #25
tencentshill wrote: post #7

Earlier quoted context omitted.

Current treasury head is Scott Bessent, previously of Soros Fund Management and Key Square Group. He's far too qualified to be part of this administration. Expect him gone soon.

He's said on Fox Business today that on the basis of whatever agreements have been made in Alaska the US now considers the public and private holdings of its European allies + Japan to be part of an American sovereign wealth fund that can be expropriated whenever some cash is needed. Either he's lying about that or he has guaranteed a position as Trump's number one favourite after Lighthizer.

I do not know why you are being downvoted as this is something I heard too and is quite serious.

> Other countries, in essence, are providing us with a sovereign wealth fund,” he told commentator Larry Kudlow, himself a top economic adviser in the first Trump term. “We have these agreements in place where the Japanese, the Koreans and to some extent the Europeans will invest in companies and industries that we direct them, largely at the president’s discretion.”

Re: US national debt reaches a record $37T, the Treasury Department reports

#85

Post by dh2022 »

tmpz22 wrote: post #54
fzeroracer wrote: post #46

Earlier quoted context omitted.

I think even in that situation, politicians will try and play ball with the rich since the majority of them are on that same side. But having to implement emergency austerity measures in this scenario would just outright blow up the US economy. If the wealthy donors and corporate interests were smart they'd take a haircut on their wealth to try and stave off this issue but it seems we're mostly in a loot-and-raze cra…

The revolution wont be like the French revolution, itll be like the Handmaids Tale. A massive return to conservatism that manages to create a capitalist first theocracy loosely following American Calvinist principles (you have money because you are gods chosen, you are poor because you deserve it, for the poor here is this underclass to blame your problems on so that you dont aim your murder at the rich).

Well, US has more guns than people… I don’t think US will succumb to “you are poor because you deserve it “ without some violent conflicts.

Re: US national debt reaches a record $37T, the Treasury Department reports

#86

Post by dh2022 »

biophysboy wrote: post #48
2OEH8eoCRo0 wrote: post #19

How do you guys see this ending? I don't see this ending well but I can't imagine what happens. Seems unsustainable but nobody wants to deal with it.

If it makes you feel better, the owners of US treasury securities also do not want a debt-fueled collapse of the government. They are our assets as much as they are our liabilities.

Owners of US treasuries are: Japanese government, a whole bunch of rich Arab Middle East governments, Social Security, Federal reserve, and the Chinese government. With the exception of the last one, the other holders are political captives.

Incidentally, Chinese government stopped buying US Treasury instruments 2015.

All these to say that arguments that depend on freedom of choice ( like this is a free market, or for every seller is a buyer, or US treasury holders want this and that) do not apply to this situation. Which makes this situation so hard to predict.

Re: US national debt reaches a record $37T, the Treasury Department reports

#87

Post by OgsyedIE »

Iwan-Zotow wrote: post #34
OgsyedIE wrote: post #25

Earlier quoted context omitted.

He's said on Fox Business today that on the basis of whatever agreements have been made in Alaska the US now considers the public and private holdings of its European allies + Japan to be part of an American sovereign wealth fund that can be expropriated whenever some cash is needed. Either he's lying about that or he has guaranteed a position as Trump's number one favourite after Lighthizer.

So Putin and Trump to agree in Alaska to loot public and private holdings of US European allies + Japan? And what would Putin get?

Besides the land and a return to the unjust peace Russia previously enjoyed it's obviously in the Kremlin's interest to have further relegitimation of the notion of spheres of influence and a hedge against China.

Re: US national debt reaches a record $37T, the Treasury Department reports

#88

Post by throw0101c »

NomDePlum wrote: post #12
tencentshill wrote: post #7

Earlier quoted context omitted.

Current treasury head is Scott Bessent, previously of Soros Fund Management and Key Square Group. He's far too qualified to be part of this administration. Expect him gone soon.

He's been in place since January so that suggests he's sticking about. During that time he's been actively campaigning for policies that are questionable but highly aligned with this administration: BBB, crypto, interest rate cuts. So qualified or not I can't see your prediction coming true. Money men on the inside of this administration are only going to make money, why make waves even if it makes normal Americans p…

> He's been in place since January so that suggests he's sticking about.

Since January there have been 4 Acting Commissioners of the IRS, then Billy Long was confirmed, but was kicked out after ~2 months, and now Scott Bessent (also Treasury Secretary) is Acting head:

* https://en.wikipedia.org/wiki/Commissioner_of_Internal_Reven...

Re: US national debt reaches a record $37T, the Treasury Department reports

#89

Post by simonsarris »

The amount of snarky comments here is truly insane. Flippant stuff used to be downvoted/shadowed immediately on HN, now it seems to be the median in some political threads. This started changing around 2019 but it's really accelerated lately.

Re: US national debt reaches a record $37T, the Treasury Department reports

#90

Post by stephen_g »

trealira wrote: post #53
2OEH8eoCRo0 wrote: post #19

How do you guys see this ending? I don't see this ending well but I can't imagine what happens. Seems unsustainable but nobody wants to deal with it.

2 years ago, Wharton predicted that the U.S. debt would be defaulted on in twenty years [0]. > Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation). Unlike technical defaults where payment…

Why would a currency issuer make the decision to default on bonds it's issued, when it can always issue new bonds and roll them over, or if it wanted to the Fed can always just buy the bonds back?

Don't think of the US (or any monetarily sovereign Government) as having the constraints of a household or business... It's fundamentally different and we make major errors (like the crazy idea the US would default) when we think of it in the wrong way...

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