Will America's debt doom us? • Hacker News Board

Re: Will America's debt doom us?

#121

Post by ThrustVectoring » Mon, Sep 23, 2019, 5:18 PM UTC

dpc_pw wrote: post #52

Low rates are a result of boomeres all over the world saving for retirement (+ CB manipulation). As soon as they start using that savings, instead of accumulating them both inflation and yields will tend to naturally raise again. More people to care for, less people to do the work -> inflation. Inflation expectation -> higher yields. That $175T wealth figure is measured at the peak of everything bubble in the US. Rea…

Inflation is basically necessary at this point in order to collapse the various asset bubbles without causing a mass default spiral on the debt issued to finance it. The housing crisis is a good portion of this; we cannot build our way out of housing without putting homeowners underwater on their mortgages en masse, and young people cannot tolerate the current trends of housing prices near areas of economic opportunity indefinitely. The only way out of this double-bind is to inflate away homeowner's mortgage debt as we make more available housing to prevent housing prices from inflating along the general trend.

Re: Will America's debt doom us?

#122

Post by turk73 » Mon, Sep 23, 2019, 5:19 PM UTC

I know we're doomed because regular people talk in terms of $20, $50, still count their change, while the government used $100M as a round off. We're in very big trouble.

Re: Will America's debt doom us?

#123

Post by dskjbfsakljb » Mon, Sep 23, 2019, 5:19 PM UTC

theflyinghorse wrote: post #60

dustingetz wrote: post #20

Earlier quoted context omitted.

The book "Looting Greece" by progressive economist Jack Rasmus explains in technical detail the "twin deficit" strategy budget deficit is balanced by trade deficit, which hints at why USA has aircraft carriers stationed around the world, projecting power that tilts the free markets in its favor which is what makes this strategy work. Here is an excerpt: http://www.dustingetz.com/:rasmus-usa-twin-deficit/

I don't understand why US having military presence around the globe tilts the free markets in their favour. Realistically, no military outside of perhaps Russian could stand up against the US but I don't think US are outright forcing trade agreements at a gun point, or am I wrong?

Look up what ended Japan self-imposed isolation.

Re: Will America's debt doom us?

#124

Post by MuffinFlavored » Mon, Sep 23, 2019, 5:19 PM UTC

bpt3 wrote: post #101

MuffinFlavored wrote: post #68

Earlier quoted context omitted.

This is a dumb unrelated question on my end but are the returns of Social Security very bad? If you put 6.2% (12.4% total with employer contribution) of your income away into index funds that grew at 7% per year, at $100k/yr gross salary ($12.4k/yr) from ages 25 - 65 (40 years), you would end up with $2.6m (in today's dollars). $2.6m converted into dividend funds with a 3% yield would be $6.6k/mo. I don't know anybod…

Social Security funds aren't allowed to be invested in the stock market, and are held in the form of US Treasuries [0]. There was talk of changing that under Bush 44, but his reform plans never gained any serious traction. [0] https://www.cbpp.org/research/social-security/policy-basics-...

> Social Security funds aren't allowed to be invested in the stock market

I know, but based on my calculations above, don't you agree that the end user (citizens) are not getting the best bang for their buck?

Re: Will America's debt doom us?

#125

Post by munk-a » Mon, Sep 23, 2019, 5:20 PM UTC

Oh darn, we're talking about the debt again? I guess it's time for Democrats to be elected, be blamed for letting the debt run away, and cobble together a half-assed fix that the next Republican presindent blows away.

Re: Will America's debt doom us?

#126

Post by MuffinFlavored » Mon, Sep 23, 2019, 5:21 PM UTC

Cd00d wrote: post #92

MuffinFlavored wrote: post #68

Earlier quoted context omitted.

This is a dumb unrelated question on my end but are the returns of Social Security very bad? If you put 6.2% (12.4% total with employer contribution) of your income away into index funds that grew at 7% per year, at $100k/yr gross salary ($12.4k/yr) from ages 25 - 65 (40 years), you would end up with $2.6m (in today's dollars). $2.6m converted into dividend funds with a 3% yield would be $6.6k/mo. I don't know anybod…

Find me 7% growth on $10k dollars for multiple decades running and you can have all my money. In other words, that's a very unreasonable mean growth rate.

https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns

Am I missing something here?

Re: Will America's debt doom us?

#127

Post by MuffinFlavored » Mon, Sep 23, 2019, 5:22 PM UTC

inscionent wrote: post #63

Pigo wrote: post #38

Earlier quoted context omitted.

Since most candidates are running on a platform of promising more free things, it doesn't seem likely.

Forget the candidates, what about our current president. He seems plenty happy spending away. Billions in Agriculture subsides to prop up his trade war, just as a start.

> He seems plenty happy spending away

I have more faith in modern politics that one man can veto an entire cabinet of elected officials on what to spend. Whether or not one man can influence them or ask them to keep spending, I have no doubts. But... how many elected lifetime professional politicians sign off on budgets + spending? I am going to guess it is more than "one man".

Re: Will America's debt doom us?

#128

Post by MuffinFlavored » Mon, Sep 23, 2019, 5:22 PM UTC

kevin_thibedeau wrote: post #107

MuffinFlavored wrote: post #43

Earlier quoted context omitted.

> It's usually the case that spending goes up at the same time, but it doesn't have to go up. I just know I read a lot of headlines about how government programs are underfunded. I feel like the base of a lot of Democratic candidate campaigns is about wanting to spend more money for people who need it (impoverished people, etc.)

As opposed to the Republican platform of spending more money while cutting tax revenue?

What do Republicans advertise they are going to spend money on? I'm only familiar with Democrats calling for free health care, free college, universal basic income, etc.

Re: Will America's debt doom us?

#129

Post by maneesh » Mon, Sep 23, 2019, 5:23 PM UTC

cryptica wrote: post #113

It seems like the whole financial system depends on the time delay between people agreeing to get a certain salary/price and then actually getting paid and spending it. By the time they actually get paid, the money is actually worth less than what they had originally agreed to. It seems that large corporations should be able to make a profit on that delay alone, even if they produce nothing of actual value. I guess i…

Fascinating. What brought you to this conclusion?

Re: Will America's debt doom us?

#130

Post by dskjbfsakljb » Mon, Sep 23, 2019, 5:23 PM UTC

_edo wrote: post #11

> Because debt-to-GDP is apples-to-nonsense. No it's not. Debt is measured in dollars. GDP is dollars per year. Debt/GDP is $/($/yr)=yr This ratio converts debt, a number it's hard to have intuition for, to years. It tells us how many years of productivity we owe. For those of us who don't manage $30 billion in assets years of productivity probably carries more meaning than big numbers with 12 zeros.

I'll add that debt is the integral (well sum) of deficits. deficit/GDP, or deficit/revenue ($4T/$3T = 33%? is that right?) is far more worrying than just the debt/GDP.

However, I will concede that GDP as a measure of productivity is hard to measure, easy to manipulate, and less effective than other measures of productivity.