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Nassim Taleb says the U.S. is in a ‘death spiral’ over government debt
- DueDilligence 3y ago[dead]
- TacticalCoder 3y agohttps://archive.is/nMSuQ https://archive.is/nMSuQ
- loeber 3y agoman who made a career making bombastic claims makes another bombastic claim... more news at 11.
- foobarian 3y agosooner or later he will get one right!
- beachtaxidriver 3y agoIsn't the "miracle" just a persistent unexpectedly higher level of inflation, over a long period of time, doing a soft-default and screwing over long bongholders? That seems like the most painless way out.
- VirusNewbie 3y agoit's not painless because it exacerbates income inequality. Remember, debt holders (especially those leveraged into assets with debt) benefit from monetary inflation. If you factor in equities that hold debt, the upper class actually holds more debt than the lower class, especially per capita.
- nocoiner 3y agoYes, either that, or a relatively stable fiscal picture coupled with moderate economic growth. Keep the deficit low-ish, and keep posting the growth numbers that have marked most of the last decade, and the debt situation looks a lot more manageable after not all that long.
- balderdash 3y agoPainless for who? It’s just a tax on savers in another form.
- vitiral 3y ago> screwing over long bongholders I think the _bongholders_ will probably come out pretty painless dude
- fuzzfactor 3y agoNot everybody remembers what it was like before Bob Marley became popular outside of the Caribbean. "Bong" was not widely recognized in the US vocabulary since it referred only to one of the legendary Rastafarian techniques for smoking their ganja, other than "spliffs", and not very many Americans had even heard of the Rastas at all back then. This was a bamboo tube about 2 inches in diameter with a water chamber at the bottom and a smoking inlet there. All other "water pipes" which had become popular with the hippies had been derived from South Asian hookahs, which had been readily available in all sizes imported from India for decorative use since before there were hippies. Nobody ever called them "bongs" until the Jamaican came along. And these were 4-foot long pieces of bamboo, anything less was not considered a "bong" until a number of years later. Long bong holders indeed.
- dmckeon 3y agoCongress-people have few incentives to restrain or reduce the national debt. There is plenty of talk, but little action. The event horizon may be distant, but the pull is inexorable. What could possibly solve this? Could we give representatives and senators bonuses for spending less and taxing more?
- chiefalchemist 3y agoNot sure about that solution, but we could elect representation that does the right thing(s), and not just the thing(s) that get them reelected.
- jcims 3y agoThat’s not how selection works unfortunately.
- jjtheblunt 3y agoI don’t know the answer to this question, but would removing the ability to be reelected cause a change in the equilibrium?
- Retric 3y agoNo, if anything it would likely make things worse as people try to maximize their out of office job the same way SEC officials end up at big banks. The advantage of “professional” politicians is they can be held accountable. Unfortunately, the general public rarely actually does so.
- jbm 3y agoWe could choose, for instance, to restrict people to single terms. I don't think long term exposure to power is actually that helpful, and it creates brand names and political careers, none of which really seems to be that helpful. I think restricting the presidency to 2 terms is actually quite positive, and I wish we had a similar system in Canada (although generally it works out to be more or less the same)
- dventimihasura 3y agoOh, rubbish https://youtu.be/NGAOLoYbZ6k?si=VQT5iNFhL7wZjPaL https://youtu.be/NGAOLoYbZ6k?si=VQT5iNFhL7wZjPaL
- calvinmorrison 3y agoOn a long enough timeline, all empires return to smaller states
- happytiger 3y agoLet’s answer this man with his own damn quote: > History is useful for the thrill of knowing the past, and for the narrative (indeed), provided it remains a harmless narrative. One should learn under severe caution. History is certainly not a place to theorize or derive general knowledge, nor is it meant to help in the future, without some caution. We can get negative confirmation from history, which is invaluable, but we get plenty of illusions of knowledge along with it. Lets also then consider that this gentleman has made a career from a book about the unpredictability of events, and should no more be venerated for his prediction capabilities than someone working under the neon lights of a flickering roadside Psychic sign. Looking at the highest US national debt levels in history while declaring that we are in for a debt crisis is on the same level of prediction. Of course the most likely scenario is debt spiral. That is the lesson of history, and the pattern of civilization, as leaders aren’t wise and austerity isn’t popular.
- astrodust 3y agoThe real black swan event was him coming up with the concept of black swan events. Everything else he's done has been increasingly ridiculous.
- happytiger 3y ago“My major hobby is teasing people who take themselves and the quality of their knowledge too seriously.” “But it remains the case that you know what is wrong with a lot more confidence than you know what is right.” “Unlike a well-defined, precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality.” — three quotes by Nassim Taleb
- AlbertCory 3y agoI suppose you think the ridiculousness of those is self-evident. Sorry, no, you need to explain.
- 3y ago
- RcouF1uZ4gsC 3y agoI would take a bet that the U.S. remains a super power longer than Nassim Taleb remains alive. He will go into a literal ‘death spiral’ before the US goes into a figurative ‘death spiral’
- BlueTemplar 3y agoYeah, but that issue also applies to your bet. Which probably also explains why this problem exists (much easier to kick the can when you probably won't be alive to see the consequences...)
- drawkward 3y agoAh, the old, >God is dead. -Nietzsche >Nietzsche is dead. -God
- zeroonetwothree 3y agoThey could both be right
- no_wizard 3y agoDoes this correctly factor in that currently the US is the western worlds de facto military, more or less? Because as long as we hold that position I don’t imagine the US government will be shut out of the debt markets at all. This is part of the problem I wager is there is still enormous incentive to keep the scheme afloat by other nations too
- mullingitover 3y agoThe dollar is still backed by a heavy metal, it just switched from gold to plutonium.
- HKH2 3y agoI guess that makes sense because plutonium goes missing too.
- mrguyorama 3y agoAmerica would do everything it possibly could to avoid a nuclear exchange. It's literally the only feasible military threat to the country. As long as nukes remain taboo, America gets to play world police and mostly get away with being a bully in some places, because what are you going to do, fight them? If you are willing to die to American soldiers 10:1 like the NVA or most of the middle east, you can prevent America from "winning", but you're still going to be living in a bombed out hellhole while teens share celebrity gossip in American homes with zero fear for their lives.
- csomar 3y agoIt didn't help the Soviet Union. I think people over-estimate the value of the military in this context. A default will dissolve the military as you can no longer pay its members. The Western world is mostly united behind the US because it's getting free defense (who doesn't want free stuff?). If you remove that, I highly doubt they'll align as much with the US.
- no_wizard 3y agoThe Soviet Union lacked a domestic economy that could keep up with the needs of its population, and there by fell apart internally. I'd argue the US can do the same, but our domestic economy - at least on paper - is more functional the Soviet Unions ever was and can provide for its citizenry and is an important market for nations all over the world. That's a major difference than with the Soviet Union, and a key one.
- PaulDavisThe1st 3y agoWe owe a bit more than 1 year's GDP. Most families that own a house owe substantially more than 1 year's income. Last time we reduced the annual deficit to zero, the usual debt hawks all reversed their position and said "this is terrible". We've demonstrated in my lifetime that we can do this. The fact that "we" don't want to right now has more to do with Republican attitudes towards taxation than anything else. MMT says we don't need to think about this the way we think about personal and corporate debt. It's not that there's nothing to see here, but the sky is not falling. Now, the stock market overvaluation ... that could be a real problem, but not the same problem.
- rajnathani 3y ago(Couldn’t edit my previous sibling comment as it is out of the edit period) > We owe a bit more than 1 year's GDP. > Most families that own a house owe substantially more than 1 year's income. Minor nitpick: A country’s income is not the GDP but rather the tax revenue collection. The US federal tax revenue is around $4.5T as of last year, which is just about 20% of the US’s GDP.
- nickff 3y agoComparing a government's debt to its GDP is like comparing a couple's debt to their employers' total revenues. The country's government doesn't own all its residents' property, and is usually unable take their income streams. MMT says a lot of things, but people only seem to follow it when convenient.
- ot 3y agoComparing debt to GDP is very much mainstream economics, not MMT. https://en.wikipedia.org/wiki/Debt-to-GDP_ratio https://en.wikipedia.org/wiki/Debt-to-GDP_ratio > is usually unable take their income streams It takes a percentage of that, through taxes. https://en.wikipedia.org/wiki/List_of_sovereign_states_by_tax_revenue_to_GDP_ratio#/media/File:Total-tax-revenues-gdp.png https://en.wikipedia.org/wiki/List_of_sovereign_states_by_ta...
- 3y ago
- CPLX 3y agoHe’s a smart guy and his books are insightful but he says this basically every year. His track record making actual monetary bets on all this has been mixed at best.
- nocoiner 3y agoIs the U.S. primary deficit really all that much more than GDP growth? Seems like if we could make it a decade or so without deficit-financed tax cuts (TCJA), new entitlements (Medicare Part D) or some catastrophe requiring massive fiscal stimulus (GFC, Covid), the debt situation should look quite a bit more manageable just on the basis of economic growth. Admittedly “if” is doing a lot of work in that sentence, though.
- jackcosgrove 3y agoDemographics present an intractable problem that no amount of fiscal rectitude can fix. The old age dependency ratios we're going to see in the future guarantee deficits. The bickering over the discretionary budget is a sideshow compared to what's happening with Medicare/Medicaid and to a lesser extent Social Security.
- nocoiner 3y agoHealth care spending has been basically flat in terms of GDP for the past decade. The doom and gloom of the early part of this century is, so far, not coming to pass, and so it’s not clear at all right now that Medicare/Medicaid is a crisis. The solution to Social Security solvency is pretty straightforward forward - when the trust fund runs out around 2035-2040, either cut benefits by 25% or raise taxes by ~1% of GDP, and it’s solvent for the next century. At that point, it’s merely a political question as to which option is more palatable to the politicians. Of course the most painless way to solve the issue would be to do something about it today, but, well, you know.
- medvezhenok 3y agoThe oldest boomers (born 1945) have not turned 80 yet. The medical problems still lie ahead. Majority of healthcare spend is in the last 5-10 years of life.
- mempko 3y agoYou have it backwards. GDP growth is a function of government spending. Observe when they accelerated spending as covid stimulus, we had a large amount of GDP growth. As soon as spending growth slows down, so will the GDP.
- starkparker 3y agoOh big deal, Weather is Happening has been saying that for at least 11 years: https://www.boston.com/news/weather/2022/02/09/weather-is-happening-boston/ https://www.boston.com/news/weather/2022/02/09/weather-is-ha...
- monetus 3y ago"You want to know what will happen in the future, ask a crystal ball, not me. I'm an economist" - Richard Wolff
- fuzzfactor 3y agoIt could be more worthwhile getting advice from a psychic rather than a professional economist though. With a psychic more people know you need to take it with a grain of salt.
- brack23678 3y agoThis guy doesn't believe what he's saying. The US has issued a lot of bonds in the world's reserve currency over many years. So what. Money is made of debt.
- johnea 3y agoWing-nuts do love to spout off about the debt 8-) Except of course when they're making astronomical increases in spending that benefits them. Such as increasing military budgets, tax cuts, and petro subsidy. And of course, while the debt may not be a specific issue, eventually the _interest_ will be. Capitalism has it's benefits, but there is no magical marketto always provide the right answers. We need a serious reorg, and that will not happen prior to total destruction of the economy. I'm not really a doomer, but those in power will absolutely not allow any systemic changes to occur, and we all will suffer the consequences... (inversly proportional to personal wealth of course)
- thehappypm 3y agoIf we’re being honest, this is why people vote Trump. They see these as real existential problems (along with China taking over manufacturing, illegal immigration, “woke” culture, and so on).
- hollandheese 3y agoI mean I could absolutely believe that the US is in a death spiral, but from the national debt?!?!? That's one of the dumbest things I've ever heard. I could believe it's from the instability of the political system, from the instability of the capitalist system, or from the effects of climate change. But national debt, please. This is just bullsh*t propaganda to enforce more austerity on the people.
- Guzba 3y agoThe actual quote seems to be “So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he explained, per Bloomberg. “And a debt spiral is like a death spiral.”
- neilv 3y agoThis piece mentions an important situation, and has weighty quotes from noteworthy people, and -- despite the business 'news' formula of simple noise generation around market direction predictions -- you think just maybe they're trying to say something meaningful, just this once... But then their final-word wrap-up at the end is to shoehorn in pumping of specific stocks. (Including one of the most famously over-valued ones, right after the article just called out mis-valuations. Maybe not intentiona, but just an accident of the standard operating procedure of tacking pumping of any arbitrary thing, onto the end of any bearish message -- create a sense of problem, and present a "solution", for retail investors foolishly trying to stock-pick or sector-pick.) Business 'news' at this point doesn't need an LLM to generate it -- you could do it with a small Perl script.
- Stealthisbook 3y agoHe doesn't seem to recognize that the government debt is backed by not only the entire productive capacity of the nation, but also the willingness of creditors to tank the world denominated currency. It's possible that some political fights could temporarily sway the market but it would take a broader societal collapse to actually kill the dollar.
- specialist 3y agoYes and: The US dollar is worth as much as the US military says it is.
- panick21_ 3y agoThat's not how markets work. And the US military does not control the world either. The US military couldn't even the value of currency in Baghdad.
- specialist 3y agoOh. My bad. How do markets work?
- panick21_ 3y agoPeople can meet anywhere anytime in private and trade whatever they want and negotiate and that determines the price. And this can easily happen in any country not controlled by the US. So the US military opinion on what the doller should be worth is pretty much irrelevant.
- specialist 3y agoWhy do trading partners have to hide their transactions?
- panick21_ 3y ago
- fragmede 3y agoThe fentanyl drug addiction crisis and the TikTok digital addiction crisis are more of a problem than government debt, from where I'm standing. there's also the housing crisis to consider, as well as the job market. government debt death spiral isn't a thing. fentanyl is.
- WhereIsTheTruth 3y agoTikTok is the least of your problems https://www.theguardian.com/global-development/2024/jan/31/meta-worlds-single-largest-marketplace-for-paedophiles-new-mexico-attorney-general-facebook-instagram https://www.theguardian.com/global-development/2024/jan/31/m...
- npv789 3y agoditch the dollar, buy bitcoin (balaji srinivasan)
- aryehof 3y agoThe USA can continue overspending, lending and making payments, all while taxing minimally - for a limited time only. Eventually, that equation will need to change. The choices are tighten the belt and/or increase taxes, war and the appropriation of resources, and/or renege on debt and start printing money. All choices and consequences (in some cases dire) sadly left to the next and future generations.
- pavs 3y agoYou know I have been hearing this and its many incarnation debt related doom scenario for atleast 20+ years, when I first started following it. Probably longer. Every few years, when debt related doomed future story pops, I feel lile no one really knows what is going on, or even worse what they are talking about.
- dikaio 3y agoPersonally, I don’t think @aryehof is wrong, it’s just that governments do really well at pushing the ball down four more years, until they can’t. It’s like that with all Empires.
- panick21_ 3y agoNobody that is serious about the topic believed in some kind of doom scenarios. Indeed people who are actually in this topic pretty much agree on the general numbers on the topic. The 'doom' talk is from people who don't know shit. However that doesn't mean there is no problem. There are plenty of people who know whats going on, its not even very complex. What people disagree about is the long term implications. The reality is this, the US getting to the point where the debt servicing costs as much as the military. And future spending is known to be high simply by the already promised social benefits. And the debt servicing could go much bigger if interest on debt goes up even slightly. Ever 1% of increase debt might result in a whole US military worth of extra debt serving per year. So, eventually the US will either have to raise taxes broadly on the whole population, or cut social spending by a large amount. Both are politically untenable and thus have a high potential of not happening or resulting in a serious political crisis. As long as neither of them happens, the situation is getting worse, and critically getting worse with ever increasing speed. And that simply isn't possible to go on forever. So its easy to go into an exponential curve of things getting worse and worse. All the other countries that ran into problems also had people say 'wouldn't happen here'. So this isn't a doom for the next couple years, even decades but even until then, spending large parts of your GDP with debt servicing isn't really great way to spend money either.
- CygnusX-1 3y agoWhy compare debt against GDP? For a person, debt to income ratio is important, but I think debt to assets is a better indicator of how likely the debt is likely to be paid off (vs being defaulted.) For the US, if you divide debt ($33T) by assets ($270T), that ratio is just 12%. This ratio will grow into a big problem only in a massively deflationary scenario when the value of all assets goes down a lot while debt stays constant. In an inflationary scenario, 12% is not a problem. I like Taleb's writings and agree with him on most things, but seems to me that the sky is not falling. (Obtained the debt and asset values from Google Bard)
- elashri 3y agoDoesn't this mean also you need to get an estimate on a more complex number, which is how much of US assets can be liquidated in a way that would help you pay the dept? I know that this is true in case of companies and individuals but how this will play our with governments? I don't know. It does not own the majority of these assets but we are talking about government dept as liabilities. Yes, they will not default as they can keep printing money (and compete with cosmic inflation rate /s) but it wouldn't help the economy and will make matter worse with time. But you will need to fight inflation which in part means you raise interest rate which in turn increase dept service and that would make you more dept. I probably wrong but I don't feel like this is a black and white situation.
- candiodari 3y agoNo, it wouldn't. Like most companies, the US "is" what it's people do. That's where the actual value is. From plumbers fixing pipes to soldiers fighting in Africa to carrier groups in the pacific. The buildings and assets inside the US support that, but actually represent zero of the value. So essentially nothing can be liquidated. There's exceptions, like raw materials (from gold to oil), but not many. The problem is that the other side, valuing the US as the total value of oil in US soil, plus all other assets, is also bullshit. You also can't sell it or buy it. For example, the natural resources of North Korea far exceed it's GDP. And yet, if I go to 10 banks, and offer kim 10 times North Korean GDP, could I buy North Korea? No ... they would not sell, nor would North Koreans honor the sale if it was made. So the value of all state organisation ... is zero. But for most countries that is the only thing valuable about them.
- apexalpha 3y agoI think that's a bit overblown. The US debt-to-GDP isn't that high. Though, I have to say, running 6,5% deficits in fiscal years with no immediate crisis or direct war seems a bit extravagant. If that becomes the norm it could spiral out of control.
- littlestymaar 3y agoAll that matters is the comparison between debt to GDP ratio, interest rates, deficit and nominal GDP growth (that is: “real” growth + inflation) see: Let R be the debt/GDP ratio, g the “real” GDP growth, i the inflation rate, and r the interest rate, the deficit that stabilizes the debt/GDP ratio is the following: R(g+i-r). For the US in 2023 you have: g=3.3% r=2.9% R=120% i=3.4% Which means that the stabilizing deficit level is 4.5%. So the current deficit is 2% higher than it should. And at this deficit level, the debt/GDP ratio would stabilize around 170%, it won't “spiral out of control”. That being said, even though the death spiral narrative is BS, the fact that governments of developed countries stopped taxing the rich and started borrowing from them instead is indeed a problem…
- specialist 3y agoGovernment spending is an investment in civil society, which is repaid thru taxation. If everyone paid their fair share of taxes, there would be no problem.
- pylua 3y agoIt’s not always a good return on investment. When you spend someone else’s money you aren’t going to penny pinch or bargain hunt like you need to.
- specialist 3y agoWhat determines a good investment? Who decides?
- pylua 3y agoI think if this could be determined objectively politics would be greatly simplified.
- fallingfrog 3y agoThere’s something that a lot of people get wrong about inflation. What you have to keep in mind is that the debt is in US dollars. So, while printing money and causing inflation to pay the debt sucks, it won’t cause a Weimar Germany situation. that only happens when the debt is in an external currency. When you inflate your currency and the debt is in your currency, it becomes easier to pay as the currency inflates. But when it’s in a foreign currency, the exchange rate tanks, and so the more money you print, the more the debt appears to increase. So you then need to print more money faster and faster to continue to make the payments. A government would only do this under threat of attack or if they thought someone would organize a coup against their government if they failed to pay. That was the exact situation in Venezuela, for instance, which is why they kept printing money to make the payments on their imf loans. But for us, it might suck, but the economy won’t collapse.
- RecycledEle 3y agoRon Paul said this in 1984. Imagine an alternate reality where the USA elected Dr. Ron Paul president in 1984, passed a constitutional amendment requiring a balanced budget in 1985, paid off its debt by 1992, and never allowed the federal government nor any state to runa deficit again because any cash flow shortfall automatically triggered an increase in all tax rates by double the percentage of the shortfall. So if the government of the State of California spent 10% more than they took in in 2023, they would see all tax rates automatically increase by 20% in 2024, which would provide pressure on their state government to stop spending.
- pylua 3y agoI didn’t know this is how it would work. I had hoped they would just confiscate the elected officials personal property or throw them all in jail. Those sorts of variance in taxes would not be good for anyone.
- RecycledEle 3y ago> Those sorts of variance in taxes would not be good for anyone. The sharp and unexpected tax increases would be good for future generations. Most voting populations* would only need one of them to help them learn to vote* for financially responsible politicians. Such sharp and unrepealable (at least for that year) tax increases would be like punishing a disobedient child. Society would learn to vote* for more fiscally conservative leaders. * This assumes we have any role in electing anyone. Given the reality of rigged elections, it is obvious when the powers that be refuse to allow balanced budget amendments. Such an amendment would trigger a desire to throw the bums out, which would be frustrated by rigged elections, which would lead to unacceptable things like people arresting their leaders. I can see why no balanced budget amendment can ever pass.
- boffinAudio 3y agoOne bomb dropped every twenty minutes for the last twenty years is a HELL OF A DRUG. You're still paying for it, and your children will be paying for it, and their children will be paying for it. So ask yourselves, Americans: is all this EXPENSIVE MURDER really in your best interest? Your debt is realy only the second worst thing you're allowing to happen to your nation. The first worst thing is the willful rule by war criminals which allows them to spend whatever they want, murdering whomever they deem culturally inferior, and that is what they are doing. The debt won't go away until the war criminals that incur it, are rotting in chains in The Hague, where they belong ..
- w0de0 3y agoWell no WHOEVER they feel culturally inferior. The Belgians, for instance, have yet to be bombed.
- neilwilson 3y agoHe's wrong. The US debt is just the amount of savings in US dollars that the non-government sector has accumulated from government spending that hasn't yet been paid back in taxes. In other words it is a component of the money supply that allows people to save safely for the future. The problem is the idea that this saving has to be rewarded in some way. It doesn't. The saving will happen anyway for status and insurance purposes and then have to be accommodated by additional spending. It's the belief amongst economists like Powell that they are 'guided by the stars' that is the issue. We should not be using interest rates as a control knob. After 15 years it should be clear they don't work as advertised. The stabilisation policy for an economy needs to be in the market for labour, not the market for money.
- pwarner 3y agoThere's such big potential to tax boomer wealth as they die that are are allowing to slip away. It has big potential to reduce the debt.
- c7THEC2DDFVV2V 3y agoCan you expand on this, I'm not 100% familiar with the way this is communicated and it just seems like mental gymnastics to avoid calling debt what it is.
- neilwilson 3y agoIf you hold a government Treasury are you in debt or do you have a saving asset?
- strawberryfie 3y agoInteresting definition of government debt, but those “paying back” the debt in future taxes are very unlikely to have any connection to those who incurred the costs to start with.
- neilwilson 3y agoBut they will have inherited the asset side of the debt from grandad won’t they. That’s the connection. Debt is really saving and when people spend those savings it eliminates the debt.
- deleted 3y ago[deleted]
- narrator 3y agoThe biggest problem with the U.S debt is it means there are people with no creativity and entrepreneurial risk-taking ability that are earning 5% on a trillion dollars through taxation of the people who are. This is an enormous waste. In China, where people aren't allowed to take money out of the country easily and there is no huge government debt market, people must invest in something that could possibly not turn out well and which is likely to increases the capital stock of the country in terms of factories, housing, infrastructure, etc. if it does. In the U.S it's just dumb money getting billions for exercising no creativity and risk-taking ability.
- Log_out_ 3y ago? And the US is not even borrowing from its citizens. It borrows from the empire currency which the world values high, because the free trade, non mercantilist capitalism world order was the best thing we got so far and nobody offers an reliable alternative. If the US cities were nuked tomorrow, but harbors and barracks and nerve centers remained, that machine would life on like nothing happened. China, with its current value system is clear mercantilist and can not replace the machinery with all the ships in the world. Europe can't do free trade, even if Ukraines life in grenades depended on it.
- lucas_membrane 3y agoThe odd thing is that the federal government's balance sheet does not have to balance, and thus no credible federal balance sheet exists. The total (accounting, market, or replacement) value of all the nationally owned assets is not reported, nor is their annual depreciation. Thus, the net worth of the national government is largely unknown. That is good; if it were reported, many citizens might desire that the government be sold off and the proceeds distributed to the taxpayers as a dividend. Of course, it has already been sold off, but no one was paying attention. Would it be better if government had to report like a business (as government requires it to report), or if business got to report like the government, or if the reporting rules were just reversed for a while so each could understand the other's problems? I think Taleb is just playing games with us. He knows that modern civilization is not a clear-cut logical proposition, that maybe no one understands how it works and evolves, and perhaps that, whatever form it takes, one of its fundamental requirements is that we maintain an optimum level of confusion. He has found his niche revealing the peculiarities of engines of ignorance that run on knowledge as explained by, e.g., Fortune.
- JoBrad 3y agoNot sure I’m really following you. The assets of a government are primarily GDP and economy. Those figures are reported quite regularly in the US and many other countries.
- lucas_membrane 3y agoI'm talking about tangible non-financial assets -- e.g. hydrogen bombs, hospital beds in VA hospitals, US and interstate highways, national parks, national laboratories, etc. IIRC, state and local governments are required to either report the value of similar state-owned assets and recognize their depreciation as an expense when it occurs, or, in some cases, to maintain them so that they do not significantly depreciate. The federal government doesn't do that. That means that whenever federal borrowing (debt) increases, people somewhat inaccurately infer that the government is operating at a loss. Private firms can increase their borrowing while they are profitable, and many have done that to pay higher dividends or buy stock in themselves in relatively recent times. But the figures in the unified budget of the US government and its various related trust funds don't tell us much about the net costs and benefits of having a government or how much it is worth.
- JohnnyLarue 3y agoWho does Nassim Taleb think the debt holders are?