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>> therefore, lots of debt that'll never get paid back The last time the national government of an English speaking nation defaulted on its debt was on January

>> therefore, lots of debt that'll never get paid back The last time the national government of an English speaking nation defaulted on its debt was on January 2 of 1672, with the Stop Of The Exchequer: https://en.wikipedia.org/wiki/Stop_of_the_Exchequer https://en.wikipedia.org/wiki/Stop_of_the_Exchequer We've now seen 351 years of debts being paid on time, so why would you think the government is suddenly not going to pay its debt? You'd need a strong thesis to explain why the 351 year old trend is coming to an end.

MuffinFlavored 4y ago
Never said I don't think we'll pay our debt. https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S How will that not limit us going forward / is the current rate of "just add it to debt/never pay it back" sustainable?
- chii 4y ago
  If people are willing to lend to the gov't (by purchasing bonds), then why is it not sustainable? Those who are doing the lending is effectively proclaiming that they don't foresee a stoppage of future lending.
  - MuffinFlavored 4y ago
    just because we can doesn't mean we should? Type "At what level does debt-to-GDP ratio hinder a nation?" into ChatGPT I'm not talking about collapse, I'm talking about hinderance going forward Raising debt, gotta service it, gotta raise taxes to pay for it or cut costs, no? https://www.pewresearch.org/fact-tank/2019/07/24/facts-about-the-national-debt/ https://www.pewresearch.org/fact-tank/2019/07/24/facts-about...
    - danaris 4y ago
      ChatGPT would only have a cogent answer to that if there were a well-accepted cogent answer in the extant literature. To the best of my understanding, any answers to that question in extant literature are either going to be highly theoretical, or about situations that are not sufficiently similar to that of the modern US to be helpful.
    - DonHopkins 4y ago
      Please stop using ChatGPT to write your comments. Nobody here is here to have a conversation with ChatGPT, and anyone who wants to talk with ChatGPT instead of actual human beings can do that privately without polluting the conversations of real human beings.
    - chii 4y ago
      The level at which GDP growth is higher than interest payments. The more important aspect is not that there's debt, but how it is spent and what is being spent on. If the spending is poor (aka, the spending is malinvestment), it doesn't matter that the current or projected future servicing is OK. Using a metric like debt to GDP does not tell the whole story.
    - D13Fd 4y ago
      > Type "At what level does debt-to-GDP ratio hinder a nation?" into ChatGPT Wow, is this what we’ve come to? This is a valid thought process now? I have no strong views on your point. But I really don’t think it’s safe to trust the very-convincing and very-possibly-incorrect responses generated by ChatGPT to inform your views (on anything).
- lkrubner 4y ago
  Not sure how far we can go but Japan's debt is currently 266% of GDP, so the USA debt of 120% is less than half of the Japanese debt: https://en.wikipedia.org/wiki/National_debt_of_Japan https://en.wikipedia.org/wiki/National_debt_of_Japan Furthermore, this number only increases when the increase in the debt is greater than the increase in the nominal GDP (a number much higher than the real growth of the economy, since the nominal GDP includes inflation, which, in this situation, can be thought of as a good thing). If the debt grows at 5% a year and the nominal GDP grows at 5% a year, then the ratio of debt-to-GDP remains largely unchanged, especially during eras when interest rates are low. In 2021 the euro area (17 countries) had a quarter when their nominal GDP growth rate was an astounding 45%: https://data.oecd.org/gdp/nominal-gdp-forecast.htm https://data.oecd.org/gdp/nominal-gdp-forecast.htm The point is, we can increase the debt every year, from now till the end of time, and that is sustainable, so long as the growth of the debt is less than the growth of the nominal GDP.
CoastalCoder 4y ago
Sorry, I guess this is a tangent, but wouldn't that depend on how you define debt? IIRC the US government failed to pay pensions for Civil War or WW1 soldiers, and the British government did something similar regarding bonds or pensions for WW1 or WW2 soldiers.
- lkrubner 4y ago
  I should have been more specific, this is about paying the capital and interest on national bonds.
tdeck 4y ago
I know they're probably not what you were thinking of when you wrote "English speaking nation", but Belize defaulted on their debt twice in 2021: https://www.bloomberg.com/news/articles/2021-05-24/belize-defaults-on-its-debt-for-second-time-in-a-year-s-p-says#xj4y7vzkg https://www.bloomberg.com/news/articles/2021-05-24/belize-de...
- lkrubner 4y ago
  Right, I don't think there is a good phrase for it, but I believe when economists make this statement they mean Britain, Canada, the USA, Australia and New Zealand. I could say "Anglosphere" but some people think that phrase is racist.

MuffinFlavored 4y ago

Never said I don't think we'll pay our debt. https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S How will that not limit us going forward / is the current rate of "just add it to debt/never pay it back" sustainable?

chii 4y ago
If people are willing to lend to the gov't (by purchasing bonds), then why is it not sustainable? Those who are doing the lending is effectively proclaiming that they don't foresee a stoppage of future lending.
- MuffinFlavored 4y ago
  just because we can doesn't mean we should? Type "At what level does debt-to-GDP ratio hinder a nation?" into ChatGPT I'm not talking about collapse, I'm talking about hinderance going forward Raising debt, gotta service it, gotta raise taxes to pay for it or cut costs, no? https://www.pewresearch.org/fact-tank/2019/07/24/facts-about-the-national-debt/ https://www.pewresearch.org/fact-tank/2019/07/24/facts-about...
  - danaris 4y ago
    ChatGPT would only have a cogent answer to that if there were a well-accepted cogent answer in the extant literature. To the best of my understanding, any answers to that question in extant literature are either going to be highly theoretical, or about situations that are not sufficiently similar to that of the modern US to be helpful.
  - DonHopkins 4y ago
    Please stop using ChatGPT to write your comments. Nobody here is here to have a conversation with ChatGPT, and anyone who wants to talk with ChatGPT instead of actual human beings can do that privately without polluting the conversations of real human beings.
  - chii 4y ago
    The level at which GDP growth is higher than interest payments. The more important aspect is not that there's debt, but how it is spent and what is being spent on. If the spending is poor (aka, the spending is malinvestment), it doesn't matter that the current or projected future servicing is OK. Using a metric like debt to GDP does not tell the whole story.
  - D13Fd 4y ago
    > Type "At what level does debt-to-GDP ratio hinder a nation?" into ChatGPT Wow, is this what we’ve come to? This is a valid thought process now? I have no strong views on your point. But I really don’t think it’s safe to trust the very-convincing and very-possibly-incorrect responses generated by ChatGPT to inform your views (on anything).
lkrubner 4y ago
Not sure how far we can go but Japan's debt is currently 266% of GDP, so the USA debt of 120% is less than half of the Japanese debt: https://en.wikipedia.org/wiki/National_debt_of_Japan https://en.wikipedia.org/wiki/National_debt_of_Japan Furthermore, this number only increases when the increase in the debt is greater than the increase in the nominal GDP (a number much higher than the real growth of the economy, since the nominal GDP includes inflation, which, in this situation, can be thought of as a good thing). If the debt grows at 5% a year and the nominal GDP grows at 5% a year, then the ratio of debt-to-GDP remains largely unchanged, especially during eras when interest rates are low. In 2021 the euro area (17 countries) had a quarter when their nominal GDP growth rate was an astounding 45%: https://data.oecd.org/gdp/nominal-gdp-forecast.htm https://data.oecd.org/gdp/nominal-gdp-forecast.htm The point is, we can increase the debt every year, from now till the end of time, and that is sustainable, so long as the growth of the debt is less than the growth of the nominal GDP.

CoastalCoder 4y ago

Sorry, I guess this is a tangent, but wouldn't that depend on how you define debt? IIRC the US government failed to pay pensions for Civil War or WW1 soldiers, and the British government did something similar regarding bonds or pensions for WW1 or WW2 soldiers.

lkrubner 4y ago
I should have been more specific, this is about paying the capital and interest on national bonds.

tdeck 4y ago

I know they're probably not what you were thinking of when you wrote "English speaking nation", but Belize defaulted on their debt twice in 2021: https://www.bloomberg.com/news/articles/2021-05-24/belize-defaults-on-its-debt-for-second-time-in-a-year-s-p-says#xj4y7vzkg https://www.bloomberg.com/news/articles/2021-05-24/belize-de...

lkrubner 4y ago
Right, I don't think there is a good phrase for it, but I believe when economists make this statement they mean Britain, Canada, the USA, Australia and New Zealand. I could say "Anglosphere" but some people think that phrase is racist.