4 ms·

Yea, I don't get the significance of $33T. It's a monotonically increasing number these days.

samspenc 3y ago
+1, I find the "for first time" part a bit of an oxymoron as we know this number is going to keep increasing. In a few months, it will top $34T for the first time, and a few months after that, $35T for the first time, and so on.
- a-user-you-like 3y ago
  +1. It will soon be 500T, then quickly followed by 1QN. Agreed, a bit of an oxymoron.
- Incipient 3y ago
  By definition it's not an oxymoron? It may be "obvious" but nothing is contradictory.
slantedview 3y ago
The reason debt matters is because if it gets high enough, it may cost us more to borrow money and could eventually trigger a debt spiral where we're unable to service our existing debt. Currently, our debt to GDP ratio is among the highest in the world [1][2]. At the moment, we're still able to borrow cheaply mainly to the dollar being the reserve currency of the world, and due to the petro dollar program (where oil producing companies sell their oil in dollars), but these things may not last (which is part of the reason why the US is pushing for war with China). The takeaway from all of this isn't necessarily that we need to cut spending on social programs while maintaining a larger military than the next several nations combined, which is what the deficit hawks referenced in this article want, it's that we should rollback the tax cuts that led the deficits in the first place. We should also be increasing domestic investments that would make us more attractive to outside investors rather than becoming an over-militarized hollowed out shell of a former super-power. If you treat your domestic economy and workforce like a leveraged buyout target, siphoning every ounce of profit out of it while saddling it with debt, the end result is likely the same as with many leveraged buyouts: collapse. 1: https://data.oecd.org/gga/general-government-debt.htm https://data.oecd.org/gga/general-government-debt.htm 2: https://data.oecd.org/chart/7bDT https://data.oecd.org/chart/7bDT
- oneTbrain23 3y ago
  You do know that Fed will give the interest collected to Uncle Sam directly. The main downside is debt is a built-in timebomb to destroy economy when condition is "ripe". Now seems to be so for USA, weak military (defeated by Talebans, Russian shovels destroyed EVERY single American high-tech including rumored downing 2 F35s in Syria), dedollarisation due speed-up by alternatives Brics and cryptos, high-unemployment and recession, lack innovations and unable to manufacture goods (China at least able to build 7nm,nowhere in USA land able to build such), superb incompetent leaderships in centuries for USA. I am netflix and chill on this Dalio-predicted world event.
- afpx 3y ago
  If I’m calculating correctly, debt is like 100,000 per person, roughly. Does someone have a plan for how to pay it? To this layperson, it seems like an inevitable default. The rich may be able to, but tax the rich, and they’ll just move it.
  - bb88 3y ago
    We in the US enjoy a feature of capitalism known as income inequality. If you take that into perspective, and understand the total personal income in 2022 was $21.8T, then $33T of debt is not such a big number. It's only 50% more than the total income. [1] If everyone paid 100% income tax it would be paid off in 1.5 years. So typically you could increase taxes by 15% and pay it off in 10 years -- assuming, of course, you can keep congress from earmarking their way to political ecstacy. Another approach is to reduce congressional spending. We subsidize the oil and farming industries heavily -- for reasons. But if you believe that the market is the most efficient use of resources, then ask yourself, why should congress choose the winners? Removing oil and farm subsidies would be ~$50B/year right there. Also it's worth noting that people typically can buy houses worth 2.5x of their annual income. [1] https://www.statista.com/statistics/216756/us-personal-income/ https://www.statista.com/statistics/216756/us-personal-incom...
- mempko 3y ago
  How would the US not be able to pay it's debts, which are denominated in dollars. Where exactly do you think dollars come from? You can't print them. I can't print them. China can't print them. So it makes no sense. Remember, government debt is an asset to the private sector. Money IS debt. The money in your bank account either came from government spending or someone else taking out a loan.
yetanotherloss 3y ago
No one knows at which point that number goes from being a hypothetical problem into a very realized one. Everyone knows the US needs to roll back the batshit tax advantages it keeps handing out to certain groups that largely already have all the money, although few seems willing to say that in a way that may impact them getting paid.
- soupfordummies 3y ago
  There's a very large portion of folks in the US that think the deficit is coming from tax advantages to folks who DON'T have all the money though.
MuffinFlavored 3y ago
https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S 120% debt to GDP ratio is "the problem"

+1, I find the "for first time" part a bit of an oxymoron as we know this number is going to keep increasing. In a few months, it will top $34T for the first time, and a few months after that, $35T for the first time, and so on.

a-user-you-like 3y ago
+1. It will soon be 500T, then quickly followed by 1QN. Agreed, a bit of an oxymoron.
Incipient 3y ago
By definition it's not an oxymoron? It may be "obvious" but nothing is contradictory.

slantedview 3y ago

The reason debt matters is because if it gets high enough, it may cost us more to borrow money and could eventually trigger a debt spiral where we're unable to service our existing debt. Currently, our debt to GDP ratio is among the highest in the world [1][2]. At the moment, we're still able to borrow cheaply mainly to the dollar being the reserve currency of the world, and due to the petro dollar program (where oil producing companies sell their oil in dollars), but these things may not last (which is part of the reason why the US is pushing for war with China). The takeaway from all of this isn't necessarily that we need to cut spending on social programs while maintaining a larger military than the next several nations combined, which is what the deficit hawks referenced in this article want, it's that we should rollback the tax cuts that led the deficits in the first place. We should also be increasing domestic investments that would make us more attractive to outside investors rather than becoming an over-militarized hollowed out shell of a former super-power. If you treat your domestic economy and workforce like a leveraged buyout target, siphoning every ounce of profit out of it while saddling it with debt, the end result is likely the same as with many leveraged buyouts: collapse. 1: https://data.oecd.org/gga/general-government-debt.htm https://data.oecd.org/gga/general-government-debt.htm 2: https://data.oecd.org/chart/7bDT https://data.oecd.org/chart/7bDT

oneTbrain23 3y ago
You do know that Fed will give the interest collected to Uncle Sam directly. The main downside is debt is a built-in timebomb to destroy economy when condition is "ripe". Now seems to be so for USA, weak military (defeated by Talebans, Russian shovels destroyed EVERY single American high-tech including rumored downing 2 F35s in Syria), dedollarisation due speed-up by alternatives Brics and cryptos, high-unemployment and recession, lack innovations and unable to manufacture goods (China at least able to build 7nm,nowhere in USA land able to build such), superb incompetent leaderships in centuries for USA. I am netflix and chill on this Dalio-predicted world event.
afpx 3y ago
If I’m calculating correctly, debt is like 100,000 per person, roughly. Does someone have a plan for how to pay it? To this layperson, it seems like an inevitable default. The rich may be able to, but tax the rich, and they’ll just move it.
- bb88 3y ago
  We in the US enjoy a feature of capitalism known as income inequality. If you take that into perspective, and understand the total personal income in 2022 was $21.8T, then $33T of debt is not such a big number. It's only 50% more than the total income. [1] If everyone paid 100% income tax it would be paid off in 1.5 years. So typically you could increase taxes by 15% and pay it off in 10 years -- assuming, of course, you can keep congress from earmarking their way to political ecstacy. Another approach is to reduce congressional spending. We subsidize the oil and farming industries heavily -- for reasons. But if you believe that the market is the most efficient use of resources, then ask yourself, why should congress choose the winners? Removing oil and farm subsidies would be ~$50B/year right there. Also it's worth noting that people typically can buy houses worth 2.5x of their annual income. [1] https://www.statista.com/statistics/216756/us-personal-income/ https://www.statista.com/statistics/216756/us-personal-incom...
mempko 3y ago
How would the US not be able to pay it's debts, which are denominated in dollars. Where exactly do you think dollars come from? You can't print them. I can't print them. China can't print them. So it makes no sense. Remember, government debt is an asset to the private sector. Money IS debt. The money in your bank account either came from government spending or someone else taking out a loan.

yetanotherloss 3y ago

No one knows at which point that number goes from being a hypothetical problem into a very realized one. Everyone knows the US needs to roll back the batshit tax advantages it keeps handing out to certain groups that largely already have all the money, although few seems willing to say that in a way that may impact them getting paid.

soupfordummies 3y ago
There's a very large portion of folks in the US that think the deficit is coming from tax advantages to folks who DON'T have all the money though.

MuffinFlavored 3y ago

https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S 120% debt to GDP ratio is "the problem"