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Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

fortune.com

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Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#121

Post by badpun »

berserk1010 wrote: post #33
PaulDavisThe1st wrote: post #16

We owe a bit more than 1 year's GDP. Most families that own a house owe substantially more than 1 year's income. Last time we reduced the annual deficit to zero, the usual debt hawks all reversed their position and said "this is terrible". We've demonstrated in my lifetime that we can do this. The fact that "we" don't want to right now has more to do with Republican attitudes towards taxation than anything else. MMT…

Take a look at Zeihan's video where he shows in a graph how US debt level compares to other major economies. https://youtu.be/mcZPOuI-vcU?t=939 . US is in the middle of the pack. US is going to be ok. Also, watch until 20:38. You will see how screwed up some countries are when it comes to debt.

> US is going to be ok.

Or, alternatively, US and a bunch of other countries are not going to be ok.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#122

Post by KoolKat23 »

bdjsiqoocwk wrote: post #119
KoolKat23 wrote: post #109

Earlier quoted context omitted.

Your asset base is in truth meaningless (and often very inflated). The true measure is your ability to pay this debt and in order to pay this debt you need to generate revenue, at a country scale this revenue is GDP. A bank's first think to look at is affordability, are you able to actually pay the installments on this. Recoverability of initial capital is secondary and only matters in a liquidation event, you don't…

> Your asset base is in truth meaningless If you believe this, do you also believe that debt is meaningless, because you can print money to pay it?

Perhaps my statement is an exaggeration but it is a secondary concern. An asset doesn't mean much if isn't productive in some way.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#123

Post by boffinAudio »

One bomb dropped every twenty minutes for the last twenty years is a HELL OF A DRUG.

You're still paying for it, and your children will be paying for it, and their children will be paying for it.

So ask yourselves, Americans: is all this EXPENSIVE MURDER really in your best interest?

Your debt is realy only the second worst thing you're allowing to happen to your nation.

The first worst thing is the willful rule by war criminals which allows them to spend whatever they want, murdering whomever they deem culturally inferior, and that is what they are doing.

The debt won't go away until the war criminals that incur it, are rotting in chains in The Hague, where they belong ..

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#124

Post by pylua »

specialist wrote: post #98

Government spending is an investment in civil society, which is repaid thru taxation. If everyone paid their fair share of taxes, there would be no problem.

It’s not always a good return on investment. When you spend someone else’s money you aren’t going to penny pinch or bargain hunt like you need to.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#125

Post by pylua »

RecycledEle wrote: post #114

Ron Paul said this in 1984. Imagine an alternate reality where the USA elected Dr. Ron Paul president in 1984, passed a constitutional amendment requiring a balanced budget in 1985, paid off its debt by 1992, and never allowed the federal government nor any state to runa deficit again because any cash flow shortfall automatically triggered an increase in all tax rates by double the percentage of the shortfall. So if…

I didn’t know this is how it would work. I had hoped they would just confiscate the elected officials personal property or throw them all in jail.

Those sorts of variance in taxes would not be good for anyone.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#126

Post by neilwilson »

He's wrong.

The US debt is just the amount of savings in US dollars that the non-government sector has accumulated from government spending that hasn't yet been paid back in taxes.

In other words it is a component of the money supply that allows people to save safely for the future.

The problem is the idea that this saving has to be rewarded in some way. It doesn't. The saving will happen anyway for status and insurance purposes and then have to be accommodated by additional spending.

It's the belief amongst economists like Powell that they are 'guided by the stars' that is the issue. We should not be using interest rates as a control knob. After 15 years it should be clear they don't work as advertised.

The stabilisation policy for an economy needs to be in the market for labour, not the market for money.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#127

Post by neilwilson »

KoolKat23 wrote: post #111
raincom wrote: post #97

Earlier quoted context omitted.

MMT works well, if exporters want to swap their real assets (commodities, food, chips, metals, labor) with US dollars (nominal). No one wants to export their real stuff to Venezuela unless the latter pays in US dollars.

Don't know why you're being down voted, it's widely accepted that it only really works for currencies that are reserve currency status. It could also work if you were entirely self-sufficient with no exports/imports. All on the proviso that humans are quick to react to inflation, using perfect information, which we're not and which we don't have.

It works for all currencies. Some currencies have higher savings rates than other currencies.

The problem is calling that saving 'debt' and then catastrophising about it.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#128

Post by c7THEC2DDFVV2V »

neilwilson wrote: post #126

He's wrong. The US debt is just the amount of savings in US dollars that the non-government sector has accumulated from government spending that hasn't yet been paid back in taxes. In other words it is a component of the money supply that allows people to save safely for the future. The problem is the idea that this saving has to be rewarded in some way. It doesn't. The saving will happen anyway for status and insura…

Can you expand on this, I'm not 100% familiar with the way this is communicated and it just seems like mental gymnastics to avoid calling debt what it is.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#129

Post by panick21_ »

PaulDavisThe1st wrote: post #67
bigstrat2003 wrote: post #40

Earlier quoted context omitted.

> The fact that "we" don't want to right now has more to do with Republican attitudes towards taxation than anything else. No, it has just as much to do with Democrat attitudes towards spending. You're right that the Republicans are partly to blame. But to balance a budget requires cutting spending as much as, if not more than, increasing revenues. The problem is that ~everyone thinks using their preferred approach (…

A lot of Democrats (not all, for sure) would be very happy to massively cut defense expenditure, which is a vast slice of federal expenditure. Alas, that has two problems: (1) US military spending is our own national version of socialism, in which we prop up communities by providing massive state subsidies, along with housing, healthcare, education and more to a large group of people (2) because of (1), it is hard to…

Cutting military alone wouldn't fix anything.

Everybody has their own pet issues they want to cut.

The reality is only broad taxes on the middle class or massive social spending can really change the long term situation.

Not that cutting military spending wouldn't be smart.

Re: Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt

#130

Post by panick21_ »

jalapenos wrote: post #112
LargeTomato wrote: post #87

Earlier quoted context omitted.

Which gold standard? There are many. Is everything backed by gold? So no loans, debt, or bonds? This is deflationary because the total value of stuff grows but the monetary base stays the same. Is there a fiat currency backed by gold? How will you avoid the monetary base growing larger than the total quantity of gold in the world? How is this functionally different from today?

The following one: simply remove the fiat, and let the market take over again. I.e. the same way commerce was carried out everywhere for approximately forever. It's presumed a gold standard would return in that scenario, but could be something else. I assume this is how it'll end up naturally though. No one will end up willing to take the other country's currency in cross border trade, so that's where hard currency w…

Non of that has anything to do with government debt. The gold standard, has never limited government spending. During the classical goal standard plenty of government had debt, plenty of governments went bust.
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