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

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

#201

Post by lucas_membrane »

JoBrad wrote: post #193
lucas_membrane wrote: post #170

The odd thing is that the federal government's balance sheet does not have to balance, and thus no credible federal balance sheet exists. The total (accounting, market, or replacement) value of all the nationally owned assets is not reported, nor is their annual depreciation. Thus, the net worth of the national government is largely unknown. That is good; if it were reported, many citizens might desire that the gover…

Not sure I’m really following you. The assets of a government are primarily GDP and economy. Those figures are reported quite regularly in the US and many other countries.

I'm talking about tangible non-financial assets -- e.g. hydrogen bombs, hospital beds in VA hospitals, US and interstate highways, national parks, national laboratories, etc. IIRC, state and local governments are required to either report the value of similar state-owned assets and recognize their depreciation as an expense when it occurs, or, in some cases, to maintain them so that they do not significantly depreciate. The federal government doesn't do that. That means that whenever federal borrowing (debt) increases, people somewhat inaccurately infer that the government is operating at a loss. Private firms can increase their borrowing while they are profitable, and many have done that to pay higher dividends or buy stock in themselves in relatively recent times. But the figures in the unified budget of the US government and its various related trust funds don't tell us much about the net costs and benefits of having a government or how much it is worth.

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

#202

Post by AlbertCory »

happytiger wrote: post #197
AlbertCory wrote: post #192

Earlier quoted context omitted.

> The author is taking his own knowledge too seriously. I don't think this even makes any sense. If it's your own knowledge, of course you take it seriously. > a subject not in his wheelhouse but with firm confidence (against his own advice) Not in his wheelhouse? He became probably 100x as wealthy as you are (guessing) by having insights about risk that most people don't have. This gave him time to read virtually ev…

Albert, you continue to engage in unnecessary personal attacks and straw man arguments. Why make a conversation a personal attack? Please stop. You have no place acting like this on Hacker News. Read the rules. Critique of the arguments vs criticism of the person, please. Also, if you want to have a constructive conversation with someone, insulting them as a lead isn’t… great. I’m sorry for the typo. It happens. Does…

If you hadn't made these wild accusations (also inaccurate and ignorant) about a person whom I happen to have met, then none of this would have transpired. You clearly know nothing about Mr. Taleb and his books, and I will feel free to say so whenever you demonstrate it. You started it.

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

#203

Post by happytiger »

happytiger wrote: post #197
AlbertCory wrote: post #192

Earlier quoted context omitted.

> The author is taking his own knowledge too seriously. I don't think this even makes any sense. If it's your own knowledge, of course you take it seriously. > a subject not in his wheelhouse but with firm confidence (against his own advice) Not in his wheelhouse? He became probably 100x as wealthy as you are (guessing) by having insights about risk that most people don't have. This gave him time to read virtually ev…

Albert, you continue to engage in unnecessary personal attacks and straw man arguments. Why make a conversation a personal attack? Please stop. You have no place acting like this on Hacker News. Read the rules. Critique of the arguments vs criticism of the person, please. Also, if you want to have a constructive conversation with someone, insulting them as a lead isn’t… great. I’m sorry for the typo. It happens. Does…

> You started it.

Are you actually 12?

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

#204

Post by neilwilson »

strawberryfie wrote: post #182
neilwilson wrote: post #178

Earlier quoted context omitted.

But they will have inherited the asset side of the debt from grandad won’t they. That’s the connection. Debt is really saving and when people spend those savings it eliminates the debt.

That assumes Grandad didn’t blow the money on dumb and/or short lived stuff.

If he did then additional tax would occur from his spending and that induced downstream in the spending chain which would eliminate the debt that was previously his savings.

Debt and savings are two sides of the same coin. If the savings disappear via spending and taxing then so does the debt.

Remember money doesn’t stop at its first use. Spending and taxing work like a stone skipping across a pond. Saving and debt is like videoing that skip and pressing pause half way through. Once you unpause by spending the savings the stone skip continues.

What you’ll note is that the stone always sinks - taxation will always match spending in the long run.

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

#205

Post by southernplaces7 »

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…

>would be very happy to massively cut defense expenditure, which is a vast slice of federal expenditure.

Just to undersocre two details that are often forgotten in discussions about how huge the U.S military budget is:

1st: as a percentage of GDP per capita, the U.S. spends less than at least two other countries and only moderately more than several others that aren't normally considered war-loving. (Singapore and Qatar for example).

2nd and more important: Of the total U.S. federal budget, military spending is far from the largest single outlay. Social services in the form of health services in general, social security, income security and medicare in particular take up much, much more Together any one of them (except medicare but smaller only by a tiny margin) is larger than the total defense budget, in some of those cases by a huge margin. Hell, even the total federal education budget for 2023 was nearly the size of the total defense budget.

Overall, of the total 6.3 trillion federal budget for 2023 at least, military spending accounted for just over 10%. A lot for a country as rich as the U.S. but not to the scale implied by a a lot of hyperbole.

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

#206

Post by strawberryfie »

neilwilson wrote: post #204
strawberryfie wrote: post #182

Earlier quoted context omitted.

That assumes Grandad didn’t blow the money on dumb and/or short lived stuff.

If he did then additional tax would occur from his spending and that induced downstream in the spending chain which would eliminate the debt that was previously his savings. Debt and savings are two sides of the same coin. If the savings disappear via spending and taxing then so does the debt. Remember money doesn’t stop at its first use. Spending and taxing work like a stone skipping across a pond. Saving and debt i…

I don’t agree that spending money always results in valuable, transferable assets. It isn’t hard to think up counter-examples: under-utilised infrastructure projects, projects that become a maintenance liability, many social and health programs, etc.

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

#207

Post by RecycledEle »

pylua wrote: post #125
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.

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

The sharp and unexpected tax increases would be good for future generations. Most voting populations* would only need one of them to help them learn to vote* for financially responsible politicians.

Such sharp and unrepealable (at least for that year) tax increases would be like punishing a disobedient child. Society would learn to vote* for more fiscally conservative leaders.

* This assumes we have any role in electing anyone. Given the reality of rigged elections, it is obvious when the powers that be refuse to allow balanced budget amendments. Such an amendment would trigger a desire to throw the bums out, which would be frustrated by rigged elections, which would lead to unacceptable things like people arresting their leaders. I can see why no balanced budget amendment can ever pass.

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

#208

Post by smolder »

mrguyorama wrote: post #190
smolder wrote: post #175

Earlier quoted context omitted.

There are a lot of Ron Swansons out there, who simultaneously decry big government and make their living directly from government spending. > The reality is only broad taxes on the middle class or massive social spending can really change the long term situation. Why the middle class, which has mostly been taxed into not existing? How about the upper class? As Warren Buffett says, they've won the class war, and gone…

>Why the middle class, which has mostly been taxed into not existing? Because that's not how the American middle class died? The American middle class died when upper management sold your solid career to the Chinese for a quick buck, and spent all the windfall on enriching themselves for decades. It's amazing you cite Warren Buffet while saying that, who commonly calls for higher taxes on the wealthy.

> It's amazing you cite Warren Buffet while saying that, who commonly calls for higher taxes on the wealthy.

From what I can tell you misread my post.

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

#209

Post by ifyoubuildit »

PaulDavisThe1st wrote: post #200
ifyoubuildit wrote: post #199

Earlier quoted context omitted.

So that's almost a quarter. Does that include social security and medicare? Now what about property taxes (or your landlords property taxes if that's the case, which just goes onto your rent)? Sales taxes? Gas taxes? Alcohol and cigarette taxes? Any of 100 other taxes? If you aren't brave enough to take on the tax code yourself, how much do you have to waste on accounting services so you don't wind up making a mistak…

That includes social security and medicare (as self-employment tax) Property tax: $2200/yr Sales tax: hard to say, local rates are in the 5% range I do my own taxes, have done every year since I moved to the USA 35 years ago. I don't really have time for this over-generalized argument about "they tax everything", least of all when you try to bring inflation into it.

Just to be clear, I'm not claiming nothing should be taxed. My point is that people often look at their federal income tax rate and think thats the whole story, when it's not even close.

New mexico is a middle of the road state when it comes to taxes (https://taxfoundation.org/data/all/state/tax-burden-by-state...), so that lowers yours a little bit. Mine is on the higher end of that.

Maybe you don't find the argument that taxes increases your costs in other ways compelling, though I don't see how. I think the usual objection to that is "well its worth it", which could be true, but it should show up in an accurate accounting.

I'd argue the same for inflation (this isn't some novel argument on my part https://en.m.wikipedia.org/wiki/Seigniorage#Seigniorage_as_a...).

I guess back to the original question though. If you're convinced your total tax burden is 22.5%, how much more would you like to have taken?

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

#210

Post by hcmacro »

lamontcg wrote: post #181
hcmacro wrote: post #171

Earlier quoted context omitted.

You should look up Wynne Godley and Sectoral Balances.

Prefer Thomas Palley and Monetary Disorder: https://www.imk-boeckler.de/fpdf/HBS-008713/p_fmm_imk_wp_93_...

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