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Will America's debt doom us?

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Re: Will America's debt doom us?

#201

Post by logfromblammo »

noobermin wrote: post #169
logfromblammo wrote: post #157

Earlier quoted context omitted.

Banish "fair share" from your vocabulary when speaking of taxation. That is a guaranteed way to derail a productive conversation, by shifting it into arguing about what is fair, rather than what would solve the problem. If we are intent on fairness, the generations that incurred the debts should be the ones forced to pay them off. So for the sake of argument, let's divide the populace by birth year, and institute a t…

What you're proposing goes against normal sensible morality, but the context is true.

Labeling one type of morality as the normal, sensible one is cheating, because normality and sensibility are value judgments. You can say it goes against the modal morality. I think that particular one generally gives older people too much of a pass for harms they inflicted while younger, and for which they never made adequate reparations.

If I expand the number of buckets to 100, modeling for 11-year-olds up to 110-year-old and older (but mostly the dead), the responsibility for the debt in 2018 still shakes out to 20% in the 110+ bucket.

We're still paying the debts of dead people. 1846 is the last year in which the national debt could be truly said to belong entirely to the living, and 1974 was the last year we actually paid off any of the debts of the dead, rather than perpetually refinancing them.

Re: Will America's debt doom us?

#202

Post by esoterica »

bin0 wrote: post #180
esoterica wrote: post #171

Earlier quoted context omitted.

Why do you think you are entitled to not pay a cent before tax day?

It's my money, why do you think the gov't should get it early? You're coming at this from the wrong perspective.

Early compared to what benchmark? You’re treating as axiomatic the idea that your taxes are only “supposed” to be due on tax day, which is not grounded in tax law at all.

Re: Will America's debt doom us?

#203

Post by Someone »

JackFr wrote: post #36
topkai22 wrote: post #26

Earlier quoted context omitted.

His proposed alternate metric, interest as a percentage of tax revenue is also deeply flawed- it misses the obligation to pay the principal, which has tripled since the low point in the early 2000s. I like the finance wonks word for debt- leverage. Taking on debt is like going out further on a lever- the debter is more exposed to swings in the overall economy. While it's worked out fine so far, a high debt to gdp rat…

> it misses the obligation to pay the principal But you never really have to do that. You can just keep rolling them. If we could keep the debt at the same absolute level inflation and productivity increases would drive it into insignificance. Of course the idea of keeping it at the same level is a fantasy.

”You can just keep rolling them”

Only if you can find people or institutions willing to buy the new bonds.

_if_ those cannot be found, the ‘easy’ (easy because all it’s debts are in US dollars) way out for the USA is to print money, but a country that has to print money because nobody wants to lend it money will find it hard to buy stuff from other countries.

Re: Will America's debt doom us?

#204

Post by zosterops »

maxerickson wrote: post #23
MuffinFlavored wrote: post #15

Earlier quoted context omitted.

In the mean time, are us Americans ever going to get a president that focuses on paying down the debt? How much would taxes have to go up (because spending can't go down, right?) for citizens to contribute their fair share of paying down the debt?

There were budget surpluses from 1998 through 2001. One thing you aren't accounting for is tax receipts going up because the economy grows. It's usually the case that spending goes up at the same time, but it doesn't have to go up.

> here were budget surpluses from 1998 through 2001.

... by borrowing from the social security trust fund.

Re: Will America's debt doom us?

#205

Post by zosterops »

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.

While I don't think that subsidies and trade wars are good things. The tariffs collected a lot more than was spent on those agriculture subsidies.

Re: Will America's debt doom us?

#206

Post by WalterBright »

If the GDP grows faster than the debt, there's no need to ever pay it off.

Similarly, if you borrow money and invest it, and the investment pays more than the interest on the debt, there's no particular reason to ever pay back the debt.

Re: Will America's debt doom us?

#207

Post by Someone »

yellowstuff wrote: post #181
_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.

No single number will tell the whole story about a country's debt. GDP today is not a perfect proxy for GDP in 10 years (Japan's will probably be about the same, the US's will probably grow a bit, China's has a decent chance of growing a lot.) GDP today is not a perfect measure of economic activity today (Ireland has a really high GDP because companies are incorporated there but don't really pay much in taxes or do m…

”No single number will tell the whole story about a country's debt.”

I don’t think anybody is making that claim. Problem is: if you can only rank values that have a total order (https://en.wikipedia.org/wiki/Total_order), so if you want to rank countries, you have to simplify.

For the judgment of “how deep is a country in debt” it also seems desirable to have the property that splitting a country into equal parts yields smaller countries that are equally deep in debt.

If you want that, “debt” on its own doesn’t cut it. Debt/population and debt/GDP are two metrics that have that property. They also are simple, so do not seem doctored, which correcting for modeled/guessed at/hoped for future growth or correcting for the age distribution of the population, average fertility, etc. easily could.

”GDP today is not a perfect proxy for GDP in 10 years”

Again: I don’t think anybody is claiming ‘perfect’.

Re: Will America's debt doom us?

#208

Post by Pigo »

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.

I'm all for scrutinizing everybody who sits in that chair, but forget the candidates? If you're concerned about the state of our financial situation, I don't see how you can't be scared of these people. It makes me hope they really are just making promises they can't begin to keep.

Re: Will America's debt doom us?

#209

Post by tunesmith »

adrianN wrote: post #188
samsonradu wrote: post #167

Earlier quoted context omitted.

German infrastructure is top-class, trains work quite well and bridges are not collapsing. May I ask where you got this from? EDIT Please don't turn this into a flame war. I am slightly worried about the effects of mainstream media, as I've seen these kind of posts on Reddit also. People keep hearing about the low/inexistent economic growth of countries like Germany or Japan and start thinking that these countries ar…

German news. We've been neglecting our infrastructure for at least a decade now, probably more. The above comment is exaggerating only slightly.

"neglecting our infrastructure for at least a decade now" honestly struck my American funny bone. But I can understand that being frustrating from a German perspective, and I mean that respectfully. :)

Re: Will America's debt doom us?

#210

Post by [deleted] »

tptacek wrote: post #119
Transfinity wrote: post #72

Earlier quoted context omitted.

The United States has a variety of techniques for making sure its business interests get what they want. Aircraft carriers are one (see Iraq, and possibly Iran if things go south), CIA-sponsored coups another (Guatemala, El Salvador), economic sanctions a third (Iran again, Russia, much of Latin America). Negotiation at gun point often takes the form of crippling sanctions until and unless a US-friendly regime is in…

This sounds like something a lot of people might believe.

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