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Why don't you believe our spending is sustainable? The USA is nowhere near default. Rates on US Treasury bills are extremely low, as they're actually seen as an

by geogra4 15y ago

Why don't you believe our spending is sustainable? The USA is nowhere near default. Rates on US Treasury bills are extremely low, as they're actually seen as an incredibly safe investment compared to both other countries and stocks in general. I sort of disagree with Friedman. I think we need to reform high school educations to make them useful. Career and Technical education needs to be seen as a viable track for students who don't go to college. High schools should let people take 2 years of programming, welding, metalwork, plumbing, carpentry, CNC machining, HVAC or other useful skills if the student doesn't plan on college. There is no reason why a HS grad should be flipping burgers. Quite frankly I think even people on the college track should learn a bit of trade work. I am an advocate for increased social spending, but I do think it should be sustainable. I don't think we need to worry about that just yet, and I think the consequences of NOT spending on society now in the midst of a great recession are pretty dire.

gyardley 15y ago
Historical patterns in financial crises, mostly. Over the past couple centuries, once sovereign debt rises over a certain percentage of GDP, countries have invariably defaulted, with the shock coming very suddenly and with a lot of pain and austerity for all involved. The book is extremely boring, but 'This Time Is Different' has a lot of data on past financial crises, which as far as I can tell is legit and untampered with. Yes, this time could be different, but I don't see any compelling reason why we'll be an exception to the pattern. I'd argue that US sovereign debt is perceived as safe right now only because other countries are further down the same path and because the market's collectively whistling past the graveyard. Projected spending on Social Security and Medicare is the other reason - these aren't 'unfunded liabilities', as they're frequently described by conservatives, because Congress is under no obligation to maintain Social Security and Medicare at current benefit levels. But if we were to maintain current benefit levels, it's quite a bit of money we've got no solid plans for generating. I could be wrong, but I suspect something has to give. Complete agreement on the need for more vocational training.

by geogra4 15y ago

gyardley 15y ago

Historical patterns in financial crises, mostly. Over the past couple centuries, once sovereign debt rises over a certain percentage of GDP, countries have invariably defaulted, with the shock coming very suddenly and with a lot of pain and austerity for all involved. The book is extremely boring, but 'This Time Is Different' has a lot of data on past financial crises, which as far as I can tell is legit and untampered with. Yes, this time could be different, but I don't see any compelling reason why we'll be an exception to the pattern. I'd argue that US sovereign debt is perceived as safe right now only because other countries are further down the same path and because the market's collectively whistling past the graveyard. Projected spending on Social Security and Medicare is the other reason - these aren't 'unfunded liabilities', as they're frequently described by conservatives, because Congress is under no obligation to maintain Social Security and Medicare at current benefit levels. But if we were to maintain current benefit levels, it's quite a bit of money we've got no solid plans for generating. I could be wrong, but I suspect something has to give. Complete agreement on the need for more vocational training.