3 ms·

I don’t know why you’re being downvoted. It’s so clear this isn’t sustainable.

by henry2023 3y ago

roenxi 3y ago
I've always assumed it is that the trends are damn scary and people don't want to think about them. Most people struggle with financial concepts like (earning >= spending -> good outcomes) and I assume at the root it is some combination of emotional responses that just don't want to tackle the uncertainty of the future. If you look far enough out, the future is scary. If nothing else eventually we get hit by a meteor. So people generally don't look forward more than a week or few - because it is unpleasant and seems a little pointless. They live with whatever seems like a good idea right now. I just wish they'd let people who are a bit more math-oriented take on budgeting decisions. We're going to be eating consequences that we didn't have to because the US public can't sit down and agree that solvency is more important than whatever distraction came up this electoral cycle.
- forgetfreeman 3y ago
  In point of fact the US public has literally no control over budgetary policy so perhaps pointing the finger at the culprits instead of the useful idiots that put them there would be worthwhile.
  - roenxi 3y ago
    It be not so! The US public has been surreptitiously cheering the madness on. I'm sure they'd agree with fiscal conservatism in principle - but ask them to support tax hikes? No way to win an election. Ask them to support budget cuts? Literally nothing on the table. I've been arguing the fiscal responsibility side on HN for a long time. There is nearly no government program where a strident call for fiscal conservatism won't get a comment downvoted. It is a needle-threading exercise to make any points in favour of not spending money; it takes a lot of care, practice and timing to argue without kicking one of several hornet nests. And that in on HN where the crowds are more reasonable and logically minded. > the culprits instead of the useful idiots The useful idiots are the culprits. Being an idiot doesn't absolve someone of responsibility.
    - latency-guy2 3y ago
      I would say go ahead and kick the hornets nest. The people who are here to spend other people's money must justify their existence, not the other way around. Without getting too inflammatory, if they were as knowledge seeking as they claim to be, they would not be fervent and unwavering about their ideas. Most of them are toothless insults anyway.
    - thedragonline 3y ago
      Let's set the rhetoric aside. What debt to gdp ratio would be reasonable? Do you have any sources to support said ratio?
      - roenxi 3y ago
        If you don't have sources, the sensible target is 0. Projects should be funded on an as-makes-sense basis and paid back. Or if you have some reason to pick a different target then sure, do that. The issue at the moment is that the ratio is trending upwards until something breaks. And debts are hitting levels where not only is it reasonable to expect breakages, but it is also mad to expect that the debt can be repaid. If people keep going the way they are, can you even imagine a realistic scenario where it ends well? People are relying on a McConnell-Schumer-Trump-Biden-No Speaker-in-the-House controlled system to take a situation where everyone is acting unreasonably and suddenly start behaving with fiscal prudence. That is unlikely. It is more likely that catastrophic consequences will happen first, then courses will be changed. I don't think there are even questions of rhetoric at this point, it looks to me like all the decisions have been locked in. I mean, they may as well bump up the budget for science at this point, why not. Great thing to spend money on. But where are the resources supposed to come from? The system is already in crisis and gridlock.
    - forgetfreeman 3y ago
      Neither of the two available political parties routinely make both tax hikes and budget cuts staples of their platform. So explain again how the general populace is somehow responsible?
- OkayPhysicist 3y ago
  Home economics and nation-state level economics are entirely, qualitatively different, not just different scales of the same thing, and people who think they're clever by comparing the two are insufferable. Global superpower economies are even more so. A government collecting more tax revenue than they spend is a sign things are going terribly wrong. Best case scenario it means they were temporarily, inadvertently overtaxing everyone. The government "printing money", and thus creating some level of inflation, is a good thing. Deflationary economies are failing economies. By far the biggest difference is that to you, money and debt are real. If you don't have enough money, you can't pay for the things you need. If you have too much debt and can't pay, people will show up and commit violence against you. At the sovereign nation-state level ("sovereign" excludes countries that gave up control over their money supply to disastrous effect, like Greece), money and debt are far less concrete. Debt represents "buy-in" on your monetary system: If people and nations are owed money from a country, they have a vested interest in that nation's continued economic prosperity. Money is an infinite resource to a sovereign nation: it can simply print more. Via taxation, they effectively destroy money, since Infinity + 1 still equals Infinity. Thus, money from a nation-state's perspective isn't about balancing the books, it's about controlling the flow.
thedragonline 3y ago
>It’s so clear this isn’t sustainable. Maybe. Having that much debt is problematic in a household budget. However, governments are a different animal - just look at Japan's debt to gdp ratio (https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/FRA/DEU/ITA/JPN/GBR/USA https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/...). Posters who claim the US Gov's debt is strangling the nation are obligated to explain why Japan hasn't imploded. The likely real answer: nobody knows what levels of debt are sustainable for a government.
- roenxi 3y ago
  Japan can't sustain a bunch of things that the US can and has a substantially lower GDP per capita. They aren't a counterexample to US debt being a problem - calibrating to follow Japan's example will involve the US dialing back its spending.
  - thedragonline 3y ago
    OK. Let's take the U.S. out of the equation and look at Japan's inflation - https://tradingeconomics.com/japan/inflation-cpi https://tradingeconomics.com/japan/inflation-cpi. Hmmm... you'd expect with the 'unsustainable' government spending in Japan that there would be an uptick in inflation. There's nothing of the sort - unless my eyes are lying to me. And this goes back to my second point - nobody really knows what levels of government spending are sustainable, and my guess, given that it's not just Japan with a high debt/GDP ratio, that it's likely a much larger number than some posters here would like to admit.
    - roenxi 3y ago
      US debt repayments are similar to their military budget, and their military budget is designed to hold down China (rival superpower) and Russia (possesses a global threat nuclear arsenal, with whom they are actively at war with) and a few other countries. I'll happily agree that the limit is unknown and it might be higher than anyone expects - but at the current trajectory we're all going to find where it is as the US hits it face-to-wall-at-speed style. Years ago we crossed the limit where that debt was never going to be repaid in real terms. Now we're getting to levels where even the interest probably isn't going to be paid back in real terms. And, in amongst this, it isn't really clear what the debate around science funding is supposed to look like. The US appears to be going broke. It'll probably struggle to find the money for big spending on science over the next few years. Even if they execute some sort of default they're still going to have to do a round of belt tightening. Also - on Japan - topical news: https://marginalrevolution.com/marginalrevolution/2023/10/japan-fact-of-the-day-12.html https://marginalrevolution.com/marginalrevolution/2023/10/ja...
yongjik 3y ago
Probably because "debt to GDP ratio" is a made-up measure and it's totally unclear that it actually indicates something. Only two things seem obvious to me: (1) There is no hard limit to how much dollars the government can issue. (2) Of course, the government cannot just issue more dollars indefinitely, before Bad Things(TM) start to happen. However, this (rather trivial) observation tells us nothing about "What is the limit (or rather, range) of how much dollars the US government can issue, before bad things start to happen?" Without explaining how you can estimate such a limit, (US debt / GDP) is just some number: There's no reason to believe that there is some hard, fixed limit X that this number is not meant to exceed.

I don’t know why you’re being downvoted. It’s so clear this isn’t sustainable.

I've always assumed it is that the trends are damn scary and people don't want to think about them. Most people struggle with financial concepts like (earning >= spending -> good outcomes) and I assume at the root it is some combination of emotional responses that just don't want to tackle the uncertainty of the future. If you look far enough out, the future is scary. If nothing else eventually we get hit by a meteor. So people generally don't look forward more than a week or few - because it is unpleasant and seems a little pointless. They live with whatever seems like a good idea right now. I just wish they'd let people who are a bit more math-oriented take on budgeting decisions. We're going to be eating consequences that we didn't have to because the US public can't sit down and agree that solvency is more important than whatever distraction came up this electoral cycle.

forgetfreeman 3y ago
In point of fact the US public has literally no control over budgetary policy so perhaps pointing the finger at the culprits instead of the useful idiots that put them there would be worthwhile.
- roenxi 3y ago
  It be not so! The US public has been surreptitiously cheering the madness on. I'm sure they'd agree with fiscal conservatism in principle - but ask them to support tax hikes? No way to win an election. Ask them to support budget cuts? Literally nothing on the table. I've been arguing the fiscal responsibility side on HN for a long time. There is nearly no government program where a strident call for fiscal conservatism won't get a comment downvoted. It is a needle-threading exercise to make any points in favour of not spending money; it takes a lot of care, practice and timing to argue without kicking one of several hornet nests. And that in on HN where the crowds are more reasonable and logically minded. > the culprits instead of the useful idiots The useful idiots are the culprits. Being an idiot doesn't absolve someone of responsibility.
  - latency-guy2 3y ago
    I would say go ahead and kick the hornets nest. The people who are here to spend other people's money must justify their existence, not the other way around. Without getting too inflammatory, if they were as knowledge seeking as they claim to be, they would not be fervent and unwavering about their ideas. Most of them are toothless insults anyway.
  - thedragonline 3y ago
    Let's set the rhetoric aside. What debt to gdp ratio would be reasonable? Do you have any sources to support said ratio?
    - roenxi 3y ago
      If you don't have sources, the sensible target is 0. Projects should be funded on an as-makes-sense basis and paid back. Or if you have some reason to pick a different target then sure, do that. The issue at the moment is that the ratio is trending upwards until something breaks. And debts are hitting levels where not only is it reasonable to expect breakages, but it is also mad to expect that the debt can be repaid. If people keep going the way they are, can you even imagine a realistic scenario where it ends well? People are relying on a McConnell-Schumer-Trump-Biden-No Speaker-in-the-House controlled system to take a situation where everyone is acting unreasonably and suddenly start behaving with fiscal prudence. That is unlikely. It is more likely that catastrophic consequences will happen first, then courses will be changed. I don't think there are even questions of rhetoric at this point, it looks to me like all the decisions have been locked in. I mean, they may as well bump up the budget for science at this point, why not. Great thing to spend money on. But where are the resources supposed to come from? The system is already in crisis and gridlock.
  - forgetfreeman 3y ago
    Neither of the two available political parties routinely make both tax hikes and budget cuts staples of their platform. So explain again how the general populace is somehow responsible?
OkayPhysicist 3y ago
Home economics and nation-state level economics are entirely, qualitatively different, not just different scales of the same thing, and people who think they're clever by comparing the two are insufferable. Global superpower economies are even more so. A government collecting more tax revenue than they spend is a sign things are going terribly wrong. Best case scenario it means they were temporarily, inadvertently overtaxing everyone. The government "printing money", and thus creating some level of inflation, is a good thing. Deflationary economies are failing economies. By far the biggest difference is that to you, money and debt are real. If you don't have enough money, you can't pay for the things you need. If you have too much debt and can't pay, people will show up and commit violence against you. At the sovereign nation-state level ("sovereign" excludes countries that gave up control over their money supply to disastrous effect, like Greece), money and debt are far less concrete. Debt represents "buy-in" on your monetary system: If people and nations are owed money from a country, they have a vested interest in that nation's continued economic prosperity. Money is an infinite resource to a sovereign nation: it can simply print more. Via taxation, they effectively destroy money, since Infinity + 1 still equals Infinity. Thus, money from a nation-state's perspective isn't about balancing the books, it's about controlling the flow.

thedragonline 3y ago

>It’s so clear this isn’t sustainable. Maybe. Having that much debt is problematic in a household budget. However, governments are a different animal - just look at Japan's debt to gdp ratio (https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/FRA/DEU/ITA/JPN/GBR/USA https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/...). Posters who claim the US Gov's debt is strangling the nation are obligated to explain why Japan hasn't imploded. The likely real answer: nobody knows what levels of debt are sustainable for a government.

roenxi 3y ago
Japan can't sustain a bunch of things that the US can and has a substantially lower GDP per capita. They aren't a counterexample to US debt being a problem - calibrating to follow Japan's example will involve the US dialing back its spending.
- thedragonline 3y ago
  OK. Let's take the U.S. out of the equation and look at Japan's inflation - https://tradingeconomics.com/japan/inflation-cpi https://tradingeconomics.com/japan/inflation-cpi. Hmmm... you'd expect with the 'unsustainable' government spending in Japan that there would be an uptick in inflation. There's nothing of the sort - unless my eyes are lying to me. And this goes back to my second point - nobody really knows what levels of government spending are sustainable, and my guess, given that it's not just Japan with a high debt/GDP ratio, that it's likely a much larger number than some posters here would like to admit.
  - roenxi 3y ago
    US debt repayments are similar to their military budget, and their military budget is designed to hold down China (rival superpower) and Russia (possesses a global threat nuclear arsenal, with whom they are actively at war with) and a few other countries. I'll happily agree that the limit is unknown and it might be higher than anyone expects - but at the current trajectory we're all going to find where it is as the US hits it face-to-wall-at-speed style. Years ago we crossed the limit where that debt was never going to be repaid in real terms. Now we're getting to levels where even the interest probably isn't going to be paid back in real terms. And, in amongst this, it isn't really clear what the debate around science funding is supposed to look like. The US appears to be going broke. It'll probably struggle to find the money for big spending on science over the next few years. Even if they execute some sort of default they're still going to have to do a round of belt tightening. Also - on Japan - topical news: https://marginalrevolution.com/marginalrevolution/2023/10/japan-fact-of-the-day-12.html https://marginalrevolution.com/marginalrevolution/2023/10/ja...

yongjik 3y ago

Probably because "debt to GDP ratio" is a made-up measure and it's totally unclear that it actually indicates something. Only two things seem obvious to me: (1) There is no hard limit to how much dollars the government can issue. (2) Of course, the government cannot just issue more dollars indefinitely, before Bad Things(TM) start to happen. However, this (rather trivial) observation tells us nothing about "What is the limit (or rather, range) of how much dollars the US government can issue, before bad things start to happen?" Without explaining how you can estimate such a limit, (US debt / GDP) is just some number: There's no reason to believe that there is some hard, fixed limit X that this number is not meant to exceed.