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U.S. debt-to-GDP ratio reaches 123%

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Re: U.S. debt-to-GDP ratio reaches 123%

#111

Post by Terr_ »

bodiekane wrote: post #90
bilsbie wrote: post #48

Earlier quoted context omitted.

[flagged]

Every good aspect of modern life and modern medicine, technology, etc started with fundamental research that can be made to sound silly. Some grad student studies the effects of alcohol on fish, learns something new about biology, publishes it so that other students and researchers learn about it, and a few years later after some new studies based on that initial research we get a new cancer drug. Somebody spends $1…

Another example: Studying bacterial scum in Yellowstone Park leads to the effectiveness of modern Polymerase Chain Reaction tests, the thing most people think of when they visualize a "DNA test."

Re: U.S. debt-to-GDP ratio reaches 123%

#112

Post by hvb2 »

ericmay wrote: post #95
elteto wrote: post #83

Earlier quoted context omitted.

Most of that money is wasted on keeping the military industrial complex fat and happy, it's not going into soldier's pockets. And I say this being pro-US and indeed seeing the world as a dangerous place. But let's not make some bullshit up about a million dollars wasted on some non-sense, when we have real problems with the DoW, which can't even audit itself, sucking up almost a trillion dollars.

> Most of that money is wasted on keeping the military industrial complex fat and happy, it's not going into soldier's pockets. And I say this being pro-US and indeed seeing the world as a dangerous place. Hi former active duty soldier here - I'm all for generally increasing pay, but you're just making claims here without any basis for them. It cost a lot of money to maintain the industries capable of producing weapo…

It's funny you go within a single paragraph from

> you have no expertise or authority to make claims as to whether we're spending the right amount of money

To

> Maybe the US is actually spending too little, and other countries are spending proportionally much less on vaporware?

But more on topic, the real question is if this is spending that is worth going into debt for. No family anywhere in the world can sustain a long period of overspending relative to income.

You talk about weapons and stuff but just understand that you're handing over your bargaining power because the rest of the world controls your debt. And at these ratios thats significant leverage.

By now you can win a war without a single shot being fired.

Re: U.S. debt-to-GDP ratio reaches 123%

#113

Post by ericmay »

hvb2 wrote: post #112
ericmay wrote: post #95

Earlier quoted context omitted.

> Most of that money is wasted on keeping the military industrial complex fat and happy, it's not going into soldier's pockets. And I say this being pro-US and indeed seeing the world as a dangerous place. Hi former active duty soldier here - I'm all for generally increasing pay, but you're just making claims here without any basis for them. It cost a lot of money to maintain the industries capable of producing weapo…

It's funny you go within a single paragraph from > you have no expertise or authority to make claims as to whether we're spending the right amount of money To > Maybe the US is actually spending too little, and other countries are spending proportionally much less on vaporware? But more on topic, the real question is if this is spending that is worth going into debt for. No family anywhere in the world can sustain a…

> It's funny you go within a single paragraph from

You made a general, pedestrian claim about spending, I questioned your claim based on what you wrote. That's all. I wouldn't read in to it more than that.

> But more on topic, the real question is if this is spending that is worth going into debt for. No family anywhere in the world can sustain a long period of overspending relative to income.

Sure but then we can just cut in other areas that aren't the military, if that's what we decide to do. You're not making a serious claim that we're overspending.

> You talk about weapons and stuff but just understand that you're handing over your bargaining power because the rest of the world controls your debt. And at these ratios thats significant leverage.

Not really. Most US debt is owed to Americans, and in the circumstances in which we're worried about some other country amassing so much debt that they can leverage us, well, it's a good thing we bought all those ships, planes, and tanks and whatnot so we can fix the issue with kinetic force.

> By now you can win a war without a single shot being fired.

Yea true enough in some cases. I'm not sure I'd disband the US military, withdraw from NATO, relocate US personnel from overseas bases supporting allies in the Philippines, Japan, Korea, and elsewhere under the assumption that maybe we can win a war without any weapons. But I'm certainly interested in your view here.

Re: U.S. debt-to-GDP ratio reaches 123%

#114

Post by win311fwg »

thenewnewguy wrote: post #51
ModernMech wrote: post #28

Earlier quoted context omitted.

Right they (the politicians) don't actually think that, they just say that to get cooked projections. Once those revenue projections turn out to be false, it doesn't matter because they already have their tax cuts baked in. Then everyone can blame the other side for deficits and campaign on fixing it. Rinse and repeat.

Let's be clear and not do this both sides thing - by "they" we mean Republicans. You may not agree with their policies or what they want to spend money on, but Democrats (at least in aggregate) live in the real world where they acknowledge for the government to spend money they will have to raise taxes. Republicans are the only party that in the 21st century acts as though we can simultaneously cut taxes and increase…

There are two ways to tax the people: By destroying money or by creating money.

Republicans may generally prefer creating money over destroying money, but that doesn't mean they aren't applying taxation. "Tax cuts" in normal speak just means a reduction in how much money is being destroyed. It does not refer to a reduction in your tax burden.

Re: U.S. debt-to-GDP ratio reaches 123%

#116

Post by hvb2 »

citrin_ru wrote: post #81
notfromhere wrote: post #14

Earlier quoted context omitted.

The problem is that half the political system thinks you can cut taxes and grow revenues. Which is an intentional strategy to repeal social programs that they’d never get the votes to do so via legislation

It's a difficult tradeoff. By taxing more and more it's easy to send the economy into the death spiral so to grow the revenue without killing the economy you need economic growth. Cutting taxes will not give the growth aromatically but carefully designed tax system with low taxes where it helps should be a part of the strategy. In practice though tax cuts usually make rich richer without helping the economy to grow (…

> In practice though tax cuts usually make rich richer without helping the economy to grow (because of lobbying/corruption).

This is being generous. It's much simpler.

The poor don't pay any federal taxes at all so you can't give them a tax cut because they don't pay any. You can give them a credit at best.

Edit:

Some data

> Another 60.3 million returns showed AGIs of less than $30,000. The average effective tax rate for those taxpayers was 1.5%, even before refundable tax credits were applied.

From: https://www.pewresearch.org/short-reads/2023/04/18/who-pays-...

Re: U.S. debt-to-GDP ratio reaches 123%

#117

Post by eigenspace »

torginus wrote: post #88

Why is this a meaningful figure? It's not debt that matters its how much it costs to finance it. It's Finance 101 that if you manage to borrow below inflation rate, and you have the luck that what you paid for appreciates, then your debt will disappear over time. On the contrary, trivial amounts of money with usury can ruin you financially.

This Finance 101 perspective is too clever by half.

Sounds like a great idea, right? But what if something out of your control[1] happens, and average interest rates on the debt burden go up from 2% to 14%? The USA can't afford to just pay off all of its debts. It must continuallly roll over it's old debts to new debts, and could easily find itself in a situation where debt servicing costs go up by an order of magnitude if the fiscal situation changes for long enough.

[1] Or in the case of the United States, you do something very stupid and very inside of your control

Re: U.S. debt-to-GDP ratio reaches 123%

#118

Post by jgbuddy »

hypeatei wrote: post #41
jgbuddy wrote: post #12

time to buy bitcoin

Haha, so you can bribe the President? I hope this comment is satire. The "masses" are well aware of crypto at this point and BTC is down 47% over this past year. It's just not that useful unless you're trying to skirt laws/regulations[1] or LARPing as a sovereign citizen. 1: Yes, I know, BTC is not even good pick for financial crimes either.

Sounds like you should short it then!

Re: U.S. debt-to-GDP ratio reaches 123%

#119

Post by ghastmaster »

eigenspace wrote: post #50
petcat wrote: post #42

Earlier quoted context omitted.

I've always heard people say that the US debt doesn't matter when the debt itself is denominated in USD. It's the old saying, if you owe the bank $1,000 then you have a problem. But if you owe the bank a trillion dollars then the bank has a problem. Especially when that trillion dollars was spent on an insane fleet of aircraft carriers.

This idea is based on the fantasy idea of "it's fine because the US can just inflate away its currency to reduce its debts". This is also often used as an argument for why countries shouldn't join the Euro because they'd be giving up an important tool. The reality is that purposefully inflating your currency to reduce your debt burden is going to upset your creditors just as much as if you just defaulted on your debt…

> It's not like lenders won't notice if the USA tried to print its way out of debt.

For historical context, this is exactly what happened when the US was on the brink of leaving the gold standard.

> From 1963 to 1966, France secretly implemented Operation Vide-Gousset to repatriate 3,313 tons of gold reserves from the Bank of England and the New York Federal Reserve. It took over 44 boat trips and 129 flights to export the gold back to the Banque de France. Since France converted its dollar holdings into gold, the French made out well when the dollar fell during the Bretton Woods period and lost 96% of its value against gold. France then withdrew from the London Gold Pool in 1966 after recovering its gold holdings to force the US to endure heavier losses.

https://www.armstrongeconomics.com/markets-by-sector/preciou...

Re: U.S. debt-to-GDP ratio reaches 123%

#120

Post by citrin_ru »

hvb2 wrote: post #116
citrin_ru wrote: post #81

Earlier quoted context omitted.

It's a difficult tradeoff. By taxing more and more it's easy to send the economy into the death spiral so to grow the revenue without killing the economy you need economic growth. Cutting taxes will not give the growth aromatically but carefully designed tax system with low taxes where it helps should be a part of the strategy. In practice though tax cuts usually make rich richer without helping the economy to grow (…

> In practice though tax cuts usually make rich richer without helping the economy to grow (because of lobbying/corruption). This is being generous. It's much simpler. The poor don't pay any federal taxes at all so you can't give them a tax cut because they don't pay any. You can give them a credit at best. Edit: Some data > Another 60.3 million returns showed AGIs of less than $30,000. The average effective tax rate…

> The poor don't pay any federal taxes at all so you can't give them a tax cut

Even if we exclude poor there are many options how to split taxes between different income brackets, how to tax salaries vs capital gain, how to split taxes between individuals and businesses, how to avoid loopholes e. t. c. (e. g. in the UK I see small business struggling because of rising taxes while multinationals pay little taxes by moving profits offshore and reporting no profits in the UK).

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