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U.S. Treasury Data Lab

datalab.usaspending.gov

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Re: U.S. Treasury Data Lab

#51

Post by Proven »

adventured wrote: post #47
jkhdigital wrote: post #34

Earlier quoted context omitted.

The problem with unconstrained government deficit finance is not inflation, it is cronyism and corruption. When 638 individuals decide how $3 trillion gets spent, almost any amount of lobbying expense will yield a positive NPV.

> When 638 individuals decide how $3 trillion gets spent Just a small correction. Federal Government spending was $4.4 trillion in 2019. It was $6.6t for 2020 [2], with $4.6t of that being mandatory spending; tax revenue was $3.4t for 2020 by comparison. We wish outlays were only $3t, we'd have a nice budget surplus right now. [1] https://www.cbo.gov/publication/56324 [2] https://www.cbo.gov/publication/57170

[dead]

Re: U.S. Treasury Data Lab

#52

Post by manwe150 »

BobbyJo wrote: post #16
lumost wrote: post #14

Earlier quoted context omitted.

That 7x that is lent will be deposited by the people it is spent on. The bank can then lend 7x that and keep fabricating money as long as there are people to profitably lend too. The rate of currency growth is then correlated to velocity for how fast it’s turned over from debt to deposit to debt minus the counter flow of debts being retired.

Yes, but doesn't that strictly invalidate: > The total amount of money, the sum of all credits and debits, is the exact same ?

The sum of all credits and debits is zero (by the double-entry accounting definition), so seems like this is tautologically true, though not very useful.

The economic principle at work is you can have $1 in the bank and loan that to 7 people sequentially (who each redeposit it), or have $7 and loan it to those same people simultaneously (who each redeposit it), but in both cases the same transactions happened ($7 out and $7 in).

Re: U.S. Treasury Data Lab

#53

Post by whatever1 »

darawk wrote: post #28
Gabriel_Martin wrote: post #27

Earlier quoted context omitted.

These are the exact sentiments I believe personal/household finance analogies evoke, and basically why I oppose their use. It evokes comparisons to some kind of possibility of something happening analogous to bankruptcy when in fact: "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." Alan Greenspan So yeah, it's just my opinion but to me…

> "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." Alan Greenspan While this is partially true: 1. Sovereign nations absolutely can and do default. See, Russia in the 1990s and the LTCM fiasco. 2. Even though they do not have to default and can always print money to pay their debts, doing so causes inflation. How much inflation it cause…

If your piece of paper is backed by the US air force, I will buy it, no matter how much you print of it.

Re: U.S. Treasury Data Lab

#55

Post by manwe150 »

AnimalMuppet wrote: post #10
tick_tock_tick wrote: post #5

Earlier quoted context omitted.

> Private banks create a good chunk of the new money that goes into circulation by issuing loans. Even this is misleading private banks do not "create" money. They add to the supply but do not create. For every loan credit there is an equal loan debit. The total amount of money, the sum of all credits and debits, is the exact same.

Yes, but also no. Yes, a loan creates both a credit and a debit, and they offset exactly. In that sense, nothing is created. But the credit spends just like cash. The debit, on the other hand, does not spend like negative cash. So in the sense of the supply of money in circulation , bank loans create money.

Wouldn’t this ‘negative cash’ be a regular financial instrument like a stock short, reverse mortgage, credit default swap, etc., which they actually can use, precisely because nothing is created by this process? It is just less liquid than hard cash, which can affect the perceived trade-able value (but that too is already factored in as expected interest).

Re: U.S. Treasury Data Lab

#56

Post by User23 »

darawk wrote: post #40
sega_sai wrote: post #37

Earlier quoted context omitted.

Sovereign nations can default if the debt is nominated in a different currency (which was the case of Russia, but is not the case for US)

No, they can default even when it is denominated in their own currency, which is what Russia did. https://en.wikipedia.org/wiki/1998_Russian_financial_crisis Most countries just choose not to do this. They weren't forced to default. They could have chosen to monetize their debt. They just didn't choose to do that.

A sovereign could choose to default even if they somehow had a net surplus. Because, you know, sovereign literally means you can do whatever you want up to some more powerful foreign sovereign invading, because you have a local monopoly on violence.

Re: U.S. Treasury Data Lab

#57

Post by darawk »

whatever1 wrote: post #53
darawk wrote: post #28

Earlier quoted context omitted.

> "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." Alan Greenspan While this is partially true: 1. Sovereign nations absolutely can and do default. See, Russia in the 1990s and the LTCM fiasco. 2. Even though they do not have to default and can always print money to pay their debts, doing so causes inflation. How much inflation it cause…

If your piece of paper is backed by the US air force, I will buy it, no matter how much you print of it.

Sure. But the rate you will buy it at will change.

Re: U.S. Treasury Data Lab

#58

Post by donavanm »

lend000 wrote: post #26
donavanm wrote: post #22

Earlier quoted context omitted.

> When a government gets in over their head bad things happen too, up to and including wars. Do they? I havent looked in a while but my recollection (of south america in particular) is that the impact of government bond default is actually pretty low. A couple years without good international bond market access, higher premiums for a few years, maybe some wrangling with the IMF and surface level "restructuring." But…

I suspect some Argentinians and Venezuelans would disagree with you about the degree of consequence. Argentina: decades of inflation and economic stagnation. Venezuela: societal collapse. With game theory, you can see how a certain amount of debt, especially when borrowed from foreign lenders, can be the optimal choice for long term relative national growth. That's pretty much what the US did for most of its history…

So the original comment was that When a person is in over their head, they can possibly file for bankruptcy. When a government gets in over their head bad things happen too, up to and including wars.

For a government default is *very* similar to the US personal & commercial bankruptcy process. Its generally structured, governed by contracts, creditors take a negotiated "haircut", payments are deferred or restructured, etc.

In light of this yes, Argentina is a great example of teh real effects. This quick hit from WSJ[1] highlights argentina issuing a new 100-year bond in 2017, with massive subsciption, 3 years after a default and 3 years before the next.

Looking at the articles infographic[2] the timeline actually includes two different defaults, 2001 & 2014. There are 4 lean years of little to no issuance in 02-05, and a tiny hit in the number of issuance in 14-15. My recollection is that larger studies across time and geography actually show minimal impact to yields ~7 years after default.

So yes, governments absolutely have access to mechanisms similar to bankruptcy. And no, default is absolutely not catastrophic to future funding, debt management, or spending. And yes again, the people of places like argentina & venezuela have suffered greatly for generations but that seems to be a different proposition than "governments cant manage huge and/or unsustainable debts without drastic outcomes."

[1] https://www.wsj.com/articles/argentina-sells-2-75-billion-of... [2] https://si.wsj.net/public/resources/images/BF-AR635_ARGENT_1...

Re: U.S. Treasury Data Lab

#60

Post by ekzhu »

Interesting findings:

1. "Amazon Restaurant & Bar Inc" received 1.3M in FY2021 while apparently empolying only 8 people and taking a revenue of 96k (https://www.manta.com/c/mhx084z/amazon-restaurant-bar-inc).

2. Google received 11k in the last 12 months, less than a Florida man named Christian Google.

3. Palantir Technologies Inc. 231.3M, versus Microsoft Corporation 357.5M in the last 12 months.

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