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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

#61

Post by berserk1010 »

matthewaveryusa wrote: post #58
berserk1010 wrote: post #33

Earlier quoted context omitted.

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.

I started watching and couldn't stop until the end. Now the only question I have is how much should I believe Zeihan? He makes a lot of bold assertions, what's his track record?

That's a valid question. He does have videos where he just speaks off top of his head, and I prefer the ones where he has charts and numbers that he speaks to. If you don't believe his charts and numbers, find ones online that you believe.

I do think someone who can hold that much minute, dry details in his brain and can cross reference them is going to be smarter than most of us. He does after all consult for major corporations and the U.S government.

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

#62

Post by gmuslera »

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,…

We don't know the future.

That glass that you have in the border of the table may never fall, may not break if fall, even if a lot of people walk by its side not noticing it. But watching it may be obvious that the entire situation is fragile, odds are high that someone will bump that glass, it will fall, and it will break if everything continue as it is going, and even worse with trends pushing to make the situation even more unstable.

Things may change, or that risk somewhat never materializes. But someone that made a career showing up patterns of fragility in several kinds of systems think that the trend points to some kind of crash.

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

#63

Post by matthewaveryusa »

berserk1010 wrote: post #61
matthewaveryusa wrote: post #58

Earlier quoted context omitted.

I started watching and couldn't stop until the end. Now the only question I have is how much should I believe Zeihan? He makes a lot of bold assertions, what's his track record?

That's a valid question. He does have videos where he just speaks off top of his head, and I prefer the ones where he has charts and numbers that he speaks to. If you don't believe his charts and numbers, find ones online that you believe. I do think someone who can hold that much minute, dry details in his brain and can cross reference them is going to be smarter than most of us. He does after all consult for major…

Yeah, he sounds very smart and pieces a lot of things together, but in a very assertive way. For example he goes on to talk about how gas is used only in the butadien petrochemical vertical but could displace oil verticals and have competitive advantage over other countries. That's cool as a theory, but really isn't a commoditized market a more likely scenario in a capitalist global economy? If I'm Mr. Gas I'm going to sell my LNG at a higher price abroad instead of selling it for the same in the US for others to make a profit instead

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

#64

Post by fuzzfactor »

vitiral wrote: post #41
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.

> screwing over long bongholders I think the _bongholders_ will probably come out pretty painless dude

Not everybody remembers what it was like before Bob Marley became popular outside of the Caribbean.

"Bong" was not widely recognized in the US vocabulary since it referred only to one of the legendary Rastafarian techniques for smoking their ganja, other than "spliffs", and not very many Americans had even heard of the Rastas at all back then.

This was a bamboo tube about 2 inches in diameter with a water chamber at the bottom and a smoking inlet there. All other "water pipes" which had become popular with the hippies had been derived from South Asian hookahs, which had been readily available in all sizes imported from India for decorative use since before there were hippies.

Nobody ever called them "bongs" until the Jamaican came along.

And these were 4-foot long pieces of bamboo, anything less was not considered a "bong" until a number of years later.

Long bong holders indeed.

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

#65

Post by PaulDavisThe1st »

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.

The debt is owed by us, the American people. Thus we compare to the total (economic) resources available to us, the American people.

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

#66

Post by happytiger »

AlbertCory wrote: post #59
happytiger wrote: post #52

Earlier quoted context omitted.

The “who correctly called the 2008 financial crisis” in the headline supports nonsensical predictionism, even if the supporting article is entirely different. Also bear in mind there’s a quote from the author for prediction as well though it is more than a tad offensive to modern sensibilities: > “If one puts an infinite number of monkeys in front of typewriters, and lets them clap away, there is a certainty that one…

There it is again. You really hate him, don't you? What things that weren't conventional wisdom have you ever done? "predictionism" -- is that a word you just invented? What does it mean?

Nope. Not at all. I am not contrarian by nature and have nothing against the man.

Respectfully, the contrarian you seek is likely in your mirror.

Here is the definition:

https://www.oed.com/dictionary/predictionism_n?tl=true

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

#67

Post by PaulDavisThe1st »

bigstrat2003 wrote: post #40
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 (…

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 convince elected representatives to cut these expenditures because of the very real and direct impact they will have on their communities.

Although both D & R representatives experience the above somewhat equally, there is some imbalance in the relationship between D & R representatives and the military-industrial complex, and that leads to us to a situation where cutting these expenditures is even more difficult than it would be if the only factors were 1+2 above.

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

#68

Post by PaulDavisThe1st »

coffeemug wrote: post #46
ot wrote: post #34

Earlier quoted context omitted.

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...

Comparing debt to GDP is mainstream economics, but it's very much different from the analogy of homeowners debts and their salaries. The proper analogy there would be government revenues, not GDP.

The government doesn't owe the debt, we the people do. We authorized & enabled the government to incur that debt on our behalf.

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

#69

Post by happytiger »

Stealthisbook wrote: post #54
jalapenos wrote: post #38

Earlier quoted context omitted.

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…

Servicing the debt is an entirely political act. If the US government wants to pay its bills, it does. The alternative is unlikely, but interesting-what if the US just says no? What enforcement mechanism is there? The biggest trade partner, biggest military, and cultural hegemon says "what are you gonna do about it?" and you do what?

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 understand that national debts are a necessary component of reserve currencies get the depth of this question.

Great comment.

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

#70

Post by happytiger »

AlbertCory wrote: post #57
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,…

You seem to have a personal thing about Taleb ("his own damn quote", "this gentleman has made a career from a book about the unpredictability of events"). Taking the 2nd one first: he's written at least five books, and they're about much more than "unpredictability of events." Have you actually read any of them? As for his own damn quote: a debt crisis is a matter of financial arithmetic, not "a flickering roadside P…

Nothing personal.

Yes all of them.

Disagree. Economics is not pure math it is deeply political.

Indeed. The point.

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