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

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

fred.stlouisfed.org

Post reply on HN
Print view View original

131–140 of 233 posts

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

#131

Post by 8note »

ericmay wrote: post #99
quickthrowman wrote: post #93

Earlier quoted context omitted.

Name a huge organization that doesn’t waste money. I’ll give you as much time as you need.

"All organizations waste money, therefore organizations should keep wasting money and it's actually fine" doesn't sound very compelling to me.

the talk of waste is in service of thw question "is the government well funded enough?"

and so far it does not appear that reducing waste would properly fund the government? a couple patriot missiles worth is not the debt, and would not allow for much more efficient single payer health care - the single biggest opportunity the US government has to reduce waste in american society

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

#133

Post by win311fwg »

SlightlyLeftPad wrote: post #123
win311fwg wrote: post #114

Earlier quoted context omitted.

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.

I’m not an economist but when trillions of dollars are created doesn’t that create an illusion of sorts of economic growth (revenue growth) in the form of inflation while also having the effect of making the general population poorer by reducing their buying power?

> making the general population poorer by reducing their buying power

Exactly. Also known as a tax. You can make someone poorer by taking their money and destroying it, or you can make someone poorer by letting them keep their money and devalue it by creating more. Same coin no matter which side you want to look at it. There is no such thing as a free lunch. The taxes are always going to get paid in the end. The only choice is in exactly how you want to pay it. Each method has its own set of tradeoffs, so, like with everything, different groups understandably believe in different methods. In practice, both methods will be used. Nobody, apart from the previous commenter, is ever completely hardline "money must only be destroyed" or "money must only be created", but groups will still debate over what is the optimal ratio.

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

#134

Post by Zigurd »

thesuitonym wrote: post #64
sumanthvepa wrote: post #22

Not an American, but I would argue that this level while little bit of a concern is not a huge issue for a superpower that borrows in its own currency and has the military and economic might to crush any party (sovereign or corporate) attempting move away from that system. You guys are too powerful.

We seem to be lacking in military might lately, and are increasingly losing economic might.

TBF the US military are not magicians. Seemingly everybody except for five people in the White House was aware that you can't successfully invade Iran, no matter how many carriers bombers and bombs you've got. It's peak asymmetrical stupidity to have tried. No amount of additional military spending will fix that. Only 2 1/2 years more to go.

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

#135

Post by ericmay »

hvb2 wrote: post #129
ericmay wrote: post #113

Earlier quoted context omitted.

> 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 ju…

> You made a general, pedestrian claim about spending I didn't do anything, that wasn't me. > You're not making a serious claim that we're overspending. This is the thread about debt to GDP ratio hitting 123%. I don't claim anything, but if this isn't overspending then I think we agree to disagree. > Not really. Most US debt is owed to Americans, and in the circumstances in which we're worried about some other countr…

> I didn't do anything, that wasn't me.

Ok you're defending it.

> I don't claim anything, but if this isn't overspending then I think we agree to disagree.

Ok if it's over-spending then let's cut the programs that align with my ideology instead of cutting military spending.

> You want to solve that with weapons?? That'll only make everyone drop the dollar, as simple as that.

Not worried at all - those dollars become worthless in a fire sale. The strength of the dollar is because of the actual physical reality and capabilities of the United States.

> The Russia vs Ukraine war and the Iran conflict show that super powers can try to use their military power but 'winning' is hard. No matter how superior you are based on the numbers. Iran isn't winning on the battlefield, their most potent weapon is economic, that has turned out to be more powerful than all their weapons combined.

You're directionally right but also wrong w.r.t America. What you've shown here isn't a weakness of the US, but a strength of the US. Unlike Russia we spend and that spending (overspending according to some) ensures that our equipment works. That's why when Iran went and bought Russian and Chinese air defense for example, we blew it up with impunity.

Iran is of course hard because we have some political considerations which would only get worse over time as we would have continued to do nothing, Iran would build more missiles and drones and then seize control of the Strait of Hormuz and then it would be too costly to do anything to stop them from doing that or continuing their nuclear weapons program.

Specifically in the case of economic warfare, Iran is losing badly. The worst outcome is some MAGA coal rollers have to pay more for gas. Iran's economy literally doesn't function due to our blockade (which means we also control the Strait of Hormuz). I'd rather pay extra at the pump (well I drive an EV but w/e) then have like 80% of my economy held hostage.

But this also reinforces the need for a higher military budget and the need to spend more to acquire more arms and capabilities. By the way, the military budget isn't actually that high as a percentage of GDP. You're welcome to do that comparison yourself.

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

#136

Post by toomuchtodo »

rayiner wrote: post #127
juujian wrote: post #3

Upsetting how we are reaching these lows while the administration is accusing everyone else of wasting taxpayer money except for themselves. At least under previous administrations you would get something for your money, like science funding and healthcare for the needy, not just bombing runs and posturing.

I don't want to waste money bombing Iran either, but the total cost of the operation has been $37.5 billion. Meanwhile, Medicare, Medicaid, and Social Security each grew around $100 billion in the last year.

Direct costs are ~$113B as of June 16th, 2026 (per the Pentagon's briefing to Congress, counter stopped on that date):

https://iran-cost-ticker.com/

Iran War Cost Tracker - https://news.ycombinator.com/item?id=47237080 - March 2026 (446 comments)

Pentagon Tells Congress First Week of Iran War Cost More Than $11.3 Billion - https://www.nytimes.com/2026/03/11/world/middleeast/iran-war... | https://archive.today/Q4oDX - March 11th, 2026

Consumer energy excess cost burden is ~$76B as of this comment (indirect regressive consumer tax):

https://iranwarcost.watson.brown.edu/

> Meanwhile, Medicare, Medicaid, and Social Security each grew around $100 billion in the last year.

While we should be efficient with these programs, that's what government is for, and what I pay US federal taxes for: to take care of my fellow citizens. Not to bomb innocent people with overpriced military industrial complex hardware on the other side of the world for illegitimate reasons (F-35 program costs now exceed $2T, for example).

https://usafacts.org/government-spending/

Pentagon Fails Eighth Audit, Eyes 2028 Turnaround - https://www.military.com/feature/2025/12/24/pentagon-fails-e... - December 24th, 2025

Annual net interest on debt is ~$900B/year, as of this comment; we could replace Medicare and Medicaid with Medicare for All for ~$2T/year, which would contribute to constraining healthcare spending increases: https://news.ycombinator.com/item?id=48666290. It is an active choice to continue to operate the entire system inefficiently; we could make other, better choices. The inefficiency and debt growth is a result of operating the system for entrenched interests to profit off of the dysfunction.

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

#137

Post by 8note »

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…

they might be pissed off, but would lack standing to take land or something else instead. Ultimately you are fine, just without the ability to take on more debt. you get to keep your assets.

the scale of problem is much worse when Haiti was forced to pay France a debt for freeing itself of slavery. Having to produce physical goods and sell them is much harder than giving out paper or adjusting numbers

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

#138

Post by eigenspace »

8note wrote: post #137
eigenspace wrote: post #50

Earlier quoted context omitted.

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…

they might be pissed off, but would lack standing to take land or something else instead. Ultimately you are fine, just without the ability to take on more debt. you get to keep your assets. the scale of problem is much worse when Haiti was forced to pay France a debt for freeing itself of slavery. Having to produce physical goods and sell them is much harder than giving out paper or adjusting numbers

What you're describing is identical with simply defaulting on loans and say "we're not going to pay you back".

Inflating away your currency has the same effect with the added downside of destroying your economy simultaneously.

________

In fact, the only time I can really see the argument for wanting the ability to inflate away currency to escape debt is if the country is weak and in a precarious enough position that they are legitimately worried that actually formally defaulting would lead to an invasion.

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

#139

Post by 8note »

wyldberry wrote: post #43
Zsfe510asG wrote: post #18

The wisdom was that the US dollar due to its exorbitant privilege ( https://en.wikipedia.org/wiki/Exorbitant_privilege#Origin ) can afford these debts. Countries put up with it because the US "provided protection" and insured maritime freedom of navigation. Oh wait ...

Dangerously close to discovering the premise of Accidental Superpower from first principles.

accidental is a strange word for actively breaking down the british and french empires, and taking over their base locations

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

#140

Post by pydry »

somenameforme wrote: post #100
pydry wrote: post #38

Earlier quoted context omitted.

Total debt / GDP is the wrong metric for that. There's no limit to the serviceability of debt in a currency you print. It makes more sense to conceptualise it as the total size of a giant savings account run by the government. We are walking further out on the ice but that is measured more in other ways - with harder metrics like inflation, access to cheap energy, resources, industrial density and capabilities and ac…

Even if we just ignore inflation and other issues, there's still a hard limit because governments don't literally just print money, but sells bonds at market rates. As confidence in the economic stability declines the interest rates the government is required to offer on those bonds trends upward. So right now even 10 year treasuries are selling with just under 5% interest. As a result we're now paying $1.4 trillion…

>governments don't literally just print money, but sells bonds at market rates

no, sometimes they literally do exactly that.

google for quantitative easing. that's what it is and it's a tool that can always be used by monetarily sovereign countries to bring bond interest rates down by as much as they want.

insolvency thus isnt possible.

Post reply on HN