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

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

#231

Post by BlueTemplar » Tue, Feb 06, 2024, 9:15 PM UTC

foofie wrote: post #77

happytiger wrote: post #69

Earlier quoted context omitted.

This really is one of the most interesting questions. Obviously, a loss of global prestige and reserve currency abandonment could be the result, but if there’s no other country to step in that has that prestige or offers a replacement… What aee the requirements of debt to suppory a global order? Is it the rise of debt thats the issue or the loss of faith in the global order that that debt represents ? People who unde…

> Obviously, a loss of global prestige and reserve currency abandonment could be the result, but if there’s no other country to step in that has that prestige or offers a replacement… I don't think the role of the US dolar as a reserve currency is put into question with a hypothetical default. The typical impact of a default is that lenders are stiffed out of the money they lended. Some might go bankrupt as a result,…

> I don't think the role of the US dolar as a reserve currency is put into question with a hypothetical default.

Why would it not ? Wasn't that how the previous reserve currencies ended ? Are there many examples of relatively as bad defaults that did not result in such an end ?

Especially when the lenders first to be screwed here are (or at least were in 2020) Japan and China.

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

#232

Post by tharmas » Tue, Feb 06, 2024, 9:24 PM UTC

sudosysgen wrote: post #158

sheepscreek wrote: post #143

Earlier quoted context omitted.

If not interest rates, what would you advise the Fed to use for controlling inflation? Please don’t say there’s no need to control inflation. That will wipe out any savings anyone has. Your money will be worth We’ve seen its ill effects time and again. Argentina has 211% inflation right now. It is a vibrant economy, crippled by inflation. People cannot save. Either spend all you have (it will be worth 1/4th in a year…

Taxes. Taxes are the other tool that can be used to control inflation, especially when most of the money supply is in the hands of relatively few and has questionable productivity. It's a shame however that taxation isn't used for monetary policy due to the political system just not being set up that way.

Agreed. Non-productive money making should be taxed more heavily than productive money making. By productive I mean non-speculative activity. Also, sales tax is harder on lower income people. Sales tax should be scrapped except on luxury items or things like cigarettes.

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

#233

Post by BlueTemplar » Tue, Feb 06, 2024, 9:41 PM UTC

RcouF1uZ4gsC wrote: post #14

I would take a bet that the U.S. remains a super power longer than Nassim Taleb remains alive. He will go into a literal ‘death spiral’ before the US goes into a figurative ‘death spiral’

Yeah, but that issue also applies to your bet. Which probably also explains why this problem exists (much easier to kick the can when you probably won't be alive to see the consequences...)

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

#234

Post by panick21_ » Wed, Feb 07, 2024, 8:10 AM UTC

specialist wrote: post #226

panick21_ wrote: post #215

Earlier quoted context omitted.

People can meet anywhere anytime in private and trade whatever they want and negotiate and that determines the price. And this can easily happen in any country not controlled by the US. So the US military opinion on what the doller should be worth is pretty much irrelevant.

Why do trading partners have to hide their transactions?

What are you talking about? Nobody 'has to' do anything. The point is they can. All the way from individuals up to states.