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The Scary Math Behind the World’s Safest Assets
- sam345 3y agoNo paywall: https://archive.is/7nRIs https://archive.is/7nRIs >>The Congressional Budget Office regularly updates its long-term budget forecasts and says that U.S. debt held by the public will surpass gross domestic product this fiscal year and that interest on that debt will equal about three-quarters of discretionary, nondefense spending. Insanity.
- JumpinJack_Cash 3y agoIt takes 2 to tango. People back in the days had to be forced to buy govt bonds, nowadays they are the ones outbidding each other for the privilege. Back in the days people would bet on themselves, we should go back to do that, even if it’s more volatile and more risky than govt bonds , it feels better and there is a reason for it, when you invest in US Govt bonds you are essentially admitting to yourself that you are a scared pussy
- TrinaryWorksToo 3y ago"Scared pussies" survive, but don't do anything. What we need is a good social safety net so people are confident that when they take a risk and fail, it doesn't mean their life ends.
- postalrat 3y agoMaybe you've been conditioned to think your life will end. It won't.
- TrinaryWorksToo 3y agoDepends on your situation. If you have family and friends maybe, but lots of people don't survive and you don't see them. Healthcare, housing, food, etc. is mostly tied to employment or lots of money. People don't have time or energy to figure out any alternatives if they exist, and face eviction and starvation if they don't, which is a whole new world of not being able to survive. We see lots of drug abuse, theft, suicide, and similar things precisely because there is no safety net.
- postalrat 3y agoHow many people are abusing drugs, stealing, killing themselves, homeless, etc after taking a risk and failing? It's probably pretty rare.
- TrinaryWorksToo 3y agoLook, I don't have the capacity to precisely answer your question. But if it is rare that people are failing through the cracks after taking a risk that's all the more reason to do it. It should be cheap.
- JumpinJack_Cash 3y agoThe safety net exists! It's called moving to the developing world where everything is cheap.
- TrinaryWorksToo 3y agoOh sure, like you can just do that if you're out of money. (/sarcasm) It costs money and time to get a passport, fly out, have a destination that will accept you, figure out security for yourself, etc. Plus, you're making it harder for the existing people there to keep prices low.
- Guvante 3y agoIf you have a bunch of money lying around, sure. But most people are pretty decently in debt or at best just outright poor when they run into issues like that.
- kristianp 3y agoThey're comparing GDP which is $/year, with debt, which is $. You can't compare different units like that.
- RA2lover 3y agoIt's being compared with debt interest, which can be converted to $/year.
- tjrgergw 3y ago> debt held by the public will surpass gross domestic product > They're comparing GDP which is $/year, with debt, which is $. You can't compare different units like that. Hopefully it's obvious to everyone else here that they're comparing the debt with the GDP of a year.
- kristianp 3y agoThat's not what it says: "The Congressional Budget Office regularly updates its long-term budget forecasts and says that U.S. debt held by the public will surpass gross domestic product this fiscal year and that interest on that debt will equal about three-quarters of discretionary, nondefense spending. "
- tjrgergw 3y agoIf debt SURPASSES gdp that means you need to be able to compare them, regardless of what else the phrase goes on to say about interest. The way I would explain it to webdevs on this website is: the >= has been defined for these two types. If instead they had written "debt interest will equal three-quarters of etc.." then you'd be 100% correct. As it is, the above poster is correct that a) debt and gdp have different units, b) the word surpass implies a comparison. All I'm adding is that there's an implied conversion: it's obvious that they mean the gdp of a year.
- tjrgergw 3y ago*hasn't been. That was a typo, in case it wasn't bleeding obvious.
- MaxikCZ 3y agoI dont get it. Why would anyone lend money to any entity that is constantly accumulating more debt? Just because they pay back, but borrow more than that in the meantime? Isnt it just one big Ponzi scheme?
- HWR_14 3y agoMost entities have constantly accumulating debt. Apples debt has been growing year after year. Would you not invest in or loan money to Apple for that reason? If nothing else, GDP grows every year, so debt can safely grow too.
- Guvante 3y agoWhen you control the money supply it becomes impossible to default for the usual reasons. If you disagree don't park your funds in T-Bonds.
- tjrgergw 3y agoSo don't. Free market.