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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

#31

Post by johnea »

Wing-nuts do love to spout off about the debt 8-)

Except of course when they're making astronomical increases in spending that benefits them. Such as increasing military budgets, tax cuts, and petro subsidy.

And of course, while the debt may not be a specific issue, eventually the _interest_ will be.

Capitalism has it's benefits, but there is no magical marketto always provide the right answers.

We need a serious reorg, and that will not happen prior to total destruction of the economy.

I'm not really a doomer, but those in power will absolutely not allow any systemic changes to occur, and we all will suffer the consequences... (inversly proportional to personal wealth of course)

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

#32

Post by Kon-Peki »

dmckeon wrote: post #5

Congress-people have few incentives to restrain or reduce the national debt. There is plenty of talk, but little action. The event horizon may be distant, but the pull is inexorable. What could possibly solve this? Could we give representatives and senators bonuses for spending less and taxing more?

> There is plenty of talk, but little action

Because that's how you win elections. The voters want to spend less on the things they don't like and more on the things they do. When people say things like "reduce the deficit", "balance the budget", or something like that they don't actually mean it. All they want is to take money away from the other side. If they really wanted to reduce the national debt, they'd vote differently. And Washington knows it.

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

#33

Post by berserk1010 »

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.

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

#34

Post by ot »

nickff wrote: post #24
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…

Comparing a government's debt to its GDP is like comparing a couple's debt to their employers' total revenues. The country's government doesn't own all its residents' property, and is usually unable take their income streams. MMT says a lot of things, but people only seem to follow it when convenient.

Comparing debt to GDP is very much mainstream economics, not MMT.

https://en.wikipedia.org/wiki/Debt-to-GDP_ratio

> is usually unable take their income streams

It takes a percentage of that, through taxes.

https://en.wikipedia.org/wiki/List_of_sovereign_states_by_ta...

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

#35

Post by balderdash »

beachtaxidriver wrote: post #4

Isn't the "miracle" just a persistent unexpectedly higher level of inflation, over a long period of time, doing a soft-default and screwing over long bongholders? That seems like the most painless way out.

Painless for who? It’s just a tax on savers in another form.

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

#36

Post by hollandheese »

I mean I could absolutely believe that the US is in a death spiral, but from the national debt?!?!?

That's one of the dumbest things I've ever heard. I could believe it's from the instability of the political system, from the instability of the capitalist system, or from the effects of climate change. But national debt, please. This is just bullsh*t propaganda to enforce more austerity on the people.

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

#37

Post by happytiger »

astrodust wrote: post #30
happytiger wrote: post #13

Let’s answer this man with his own damn quote : > History is useful for the thrill of knowing the past, and for the narrative (indeed), provided it remains a harmless narrative. One should learn under severe caution. History is certainly not a place to theorize or derive general knowledge, nor is it meant to help in the future, without some caution. We can get negative confirmation from history, which is invaluable,…

The real black swan event was him coming up with the concept of black swan events. Everything else he's done has been increasingly ridiculous.

“My major hobby is teasing people who take themselves and the quality of their knowledge too seriously.”

“But it remains the case that you know what is wrong with a lot more confidence than you know what is right.”

“Unlike a well-defined, precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality.”

— three quotes by Nassim Taleb

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

#38

Post by jalapenos »

happytiger wrote: post #13

Let’s answer this man with his own damn quote : > History is useful for the thrill of knowing the past, and for the narrative (indeed), provided it remains a harmless narrative. One should learn under severe caution. History is certainly not a place to theorize or derive general knowledge, nor is it meant to help in the future, without some caution. We can get negative confirmation from history, which is invaluable,…

Isn't he just saying it's inevitable from what's observable? E.g. approaching the point where servicing the debt itself becomes untenable?

There's nothing historical or predictive involved that I can see. If a group of people are telling you again and again, for decades, that "we're just not ever going to even slow down the pace we're wracking up unrepayable debt, no matter what", isn't it just a case of take them at their word, and extrapolate to the obvious?

Like, if a car is heading towards a cliff, with the driver loudly yelling out the window "I'm driving off this cliff!", can't we just take him at his word?

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

#39

Post by Guzba »

The actual quote seems to be “So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he explained, per Bloomberg. “And a debt spiral is like a death spiral.”

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

#40

Post by bigstrat2003 »

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…

> 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 ("just raise taxes"/"just cut spending") is more important than getting the budget balanced, so they are unwilling to compromise. And the American people get the shaft, as ever.

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