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The bad news is the US has a ballooning, titanic budget deficit that is at wartime levels and is completely unsustainable. Greece too can have booming economies

The bad news is the US has a ballooning, titanic budget deficit that is at wartime levels and is completely unsustainable. Greece too can have booming economies when the government is raking up debt. The good news is there are genuine, revolutionary innovations in the economy, namely AI. You can't explain away AI as a mirage propped up by government spending. The entire stock market is held up by the magnificent 7, and these stocks in turn are held up investors' AI dreams.

JohnMakin 3y ago
How will AI possibly help the economy? if it achieved even 1/10th of what the techno optimists think, you’ll see massive unemployment and likely collapse of credit markets that have been hanging on for a thread for a long time (like the trillions in student loan debt). I just can’t possibly see how AI is going to revolutionize the economy, unless you define the “economy” as the nasdaq, then yea, i guess so, but that’s a real simpleton view.
- GreedClarifies 3y ago
  At a minimum it will automate which will increase productivity and almost certainly increase aggregate supply. In a more AI maximal case it will solve new problems, the increase in GDP from this case is very large.
  - katbyte 3y ago
    You didn’t address the main issue asked about: what happens with all the people out of work?
    - cwalv 3y ago
      They can keep working, just more effectively
    - aurareturn 3y ago
      What happened when electricity put so many manual laborers out of work?
      - hhjinks 3y ago
        That's not what they're asking. What happens to the individuals if AI can automate a large portion of service jobs? A lot of people who lost their jobs due to disrupting innovations never managed to return to their previous income level. And regardless, how does society survive a potential collapse of employment in the service sectors? The service industry employs ~80% of the employed population. If "just" 50% of service jobs can be automated, you've got ~60 million people losing their livelihood in the US alone. New jobs don't spring up overnight, especially if humans are redundant in the service industry. What happens to those 60 million people?
        aurareturn 3y ago
        60 million people aren’t going to lose their jobs overnight. It’ll be a long process.
  - jonkho 3y ago
    ChatGPT will automate what valuable tasks, exactly?
- mkii 3y ago
  You see, the AI will allow people to free up enough time in their J1, J2, J3, etc. that they will have enough time to run more side-hustles or gig-economy jobs. ECONOMY! /s
guelo 3y ago
Deficit doesn't seem that bad: https://fred.stlouisfed.org/series/FYFSDFYGDP https://fred.stlouisfed.org/series/FYFSDFYGDP 2023's number will probably come in better than Trump's pre-pandemic deficit.
- lizardking 3y ago
  Source? From a cursory Google search I’m seeing a 2019 deficit of of ~980 Billion vs a 2023 of 1.7 Trillion.
  - guelo 3y ago
    Did you click on my link? gdp to deficit ratio
- cwalv 3y ago
  Wait until the economy sneezes. Tax receipts fall, interest expense is only going up as more debt rolls over to higher Treasury rates.
- rich_sasha 3y ago
  The pertinent fraction is usually public debt (total) to GDP, which stands at 130% and is quite high. Up to 60% is considered a low, healthy level, up to 100% is considered not terrible, 130% is beyond that. The US can get away with it, for a bunch of reasons, but essentially because it is such a powerful economy and trustworthy counterparty, but it is a high level nonetheless. For comparison, the "indebted EU"'s fraction is 83% at pixel time. UK, not in the EU anymore, struggling a bit with debt, it around 100%.
  - guelo 3y ago
    The crime was Trump's deficit-fueling tax cuts during boom times. If he had stayed on Obama's track we would have had decent surplusses leaving us more prepared for the covid recession. Most economic theories say to counterbalance recessions by cutting back during boom times and spending more during down times. Biden is bringing us back faster post-pandemic than Obama post '08 financial crisis. Which indicates that the pandemic spending was appropriate, even if it fueled temporary inflation we're now growing way faster than most other economies.
deleted 3y ago
[deleted]
anjel 3y ago
You can finance amazing amounts of deficit spending when the world overwhelmingly desires to store its wealth in Dollars...
- mkii 3y ago
  It's not really the storing, it's the spending. USD buys oil, baby!
lmm 3y ago
> You can't explain away AI as a mirage propped up by government spending. You absolutely can. Like, sure, it can generate crap quickly, but whether that translates into genuine productivity improvements is not really proven yet.
- cwalv 3y ago
  It is for me. I don't see it taking my job (yet), but I have no doubt it will help with productivity. Just like Google helped with productivity for my job.
imtringued 3y ago
>Greece too can have booming economies when the government is raking up debt. That is not a good example. Greece was growing 5% back in those days and it was growing fast enough to outpace the debt. In fact, most of the debt to GDP explosion happened after the austerity policies, because GDP crashed and debt stayed the same. Greece didn't really have a spending problem either but rather the problem is the rampant tax evasion, i.e. there was a collection problem. Once the arm chair experts of the Troika got their way, Greece went downhill faster than from the original debt crisis.

JohnMakin 3y ago

How will AI possibly help the economy? if it achieved even 1/10th of what the techno optimists think, you’ll see massive unemployment and likely collapse of credit markets that have been hanging on for a thread for a long time (like the trillions in student loan debt). I just can’t possibly see how AI is going to revolutionize the economy, unless you define the “economy” as the nasdaq, then yea, i guess so, but that’s a real simpleton view.

GreedClarifies 3y ago
At a minimum it will automate which will increase productivity and almost certainly increase aggregate supply. In a more AI maximal case it will solve new problems, the increase in GDP from this case is very large.
- katbyte 3y ago
  You didn’t address the main issue asked about: what happens with all the people out of work?
  - cwalv 3y ago
    They can keep working, just more effectively
  - aurareturn 3y ago
    What happened when electricity put so many manual laborers out of work?
    - hhjinks 3y ago
      That's not what they're asking. What happens to the individuals if AI can automate a large portion of service jobs? A lot of people who lost their jobs due to disrupting innovations never managed to return to their previous income level. And regardless, how does society survive a potential collapse of employment in the service sectors? The service industry employs ~80% of the employed population. If "just" 50% of service jobs can be automated, you've got ~60 million people losing their livelihood in the US alone. New jobs don't spring up overnight, especially if humans are redundant in the service industry. What happens to those 60 million people?
      - aurareturn 3y ago
        60 million people aren’t going to lose their jobs overnight. It’ll be a long process.
- jonkho 3y ago
  ChatGPT will automate what valuable tasks, exactly?
mkii 3y ago
You see, the AI will allow people to free up enough time in their J1, J2, J3, etc. that they will have enough time to run more side-hustles or gig-economy jobs. ECONOMY! /s

guelo 3y ago

Deficit doesn't seem that bad: https://fred.stlouisfed.org/series/FYFSDFYGDP https://fred.stlouisfed.org/series/FYFSDFYGDP 2023's number will probably come in better than Trump's pre-pandemic deficit.

lizardking 3y ago
Source? From a cursory Google search I’m seeing a 2019 deficit of of ~980 Billion vs a 2023 of 1.7 Trillion.
- guelo 3y ago
  Did you click on my link? gdp to deficit ratio
cwalv 3y ago
Wait until the economy sneezes. Tax receipts fall, interest expense is only going up as more debt rolls over to higher Treasury rates.
rich_sasha 3y ago
The pertinent fraction is usually public debt (total) to GDP, which stands at 130% and is quite high. Up to 60% is considered a low, healthy level, up to 100% is considered not terrible, 130% is beyond that. The US can get away with it, for a bunch of reasons, but essentially because it is such a powerful economy and trustworthy counterparty, but it is a high level nonetheless. For comparison, the "indebted EU"'s fraction is 83% at pixel time. UK, not in the EU anymore, struggling a bit with debt, it around 100%.
- guelo 3y ago
  The crime was Trump's deficit-fueling tax cuts during boom times. If he had stayed on Obama's track we would have had decent surplusses leaving us more prepared for the covid recession. Most economic theories say to counterbalance recessions by cutting back during boom times and spending more during down times. Biden is bringing us back faster post-pandemic than Obama post '08 financial crisis. Which indicates that the pandemic spending was appropriate, even if it fueled temporary inflation we're now growing way faster than most other economies.

deleted 3y ago

[deleted]

anjel 3y ago

You can finance amazing amounts of deficit spending when the world overwhelmingly desires to store its wealth in Dollars...

mkii 3y ago
It's not really the storing, it's the spending. USD buys oil, baby!

lmm 3y ago

> You can't explain away AI as a mirage propped up by government spending. You absolutely can. Like, sure, it can generate crap quickly, but whether that translates into genuine productivity improvements is not really proven yet.

cwalv 3y ago
It is for me. I don't see it taking my job (yet), but I have no doubt it will help with productivity. Just like Google helped with productivity for my job.

imtringued 3y ago

>Greece too can have booming economies when the government is raking up debt. That is not a good example. Greece was growing 5% back in those days and it was growing fast enough to outpace the debt. In fact, most of the debt to GDP explosion happened after the austerity policies, because GDP crashed and debt stayed the same. Greece didn't really have a spending problem either but rather the problem is the rampant tax evasion, i.e. there was a collection problem. Once the arm chair experts of the Troika got their way, Greece went downhill faster than from the original debt crisis.