4 ms·
The U.S. Government Will Soon Spend More on Interest Payments Than Defense
- cebert 3y agohttps://archive.ph/mbz1p https://archive.ph/mbz1p
- marginallen 3y ago[dead]
- jamesredd 3y agoThe truth is that the US can no longer afford to be the police of the world, and as this recent Houthi situation has shown, lacks the capacity to do so. What's even more worrisome is the nuclear arsenal of the US could fall into the wrong hands in the event of a civil war - with the upcoming presidential election. Disarmament, of conventional and nuclear weapons, should be a long term goal of the US.
- helloooooooo 3y ago[flagged]
- verticalscaler 3y ago[flagged]
- demondemidi 3y ago[flagged]
- deleted 3y ago[deleted]
- verticalscaler 3y ago[flagged]
- CommanderData 3y agoDisarmament goes in hand with being less aggressive in other parts of the world. Practically means receding army bases including the biggest American outpost the US has in the middle east at the moment (I'll let you guess which country that is). It will never happen because it does not align at all with it's foreign / soft expansion policies.
- matthewfelgate 3y agoYou think the world would be less aggressive without American policing? It's an interesting argument...
- m0llusk 3y agoRecent Houthi situation? That mess has been festering since 2004.
- devjab 3y agoWe’ve had warships fighting pirates in the area for two decades, we being Denmark. The US does very little “policing” in the area compare to European nations. Which isn’t too weird considering we’re much more affected by these things. The US is mostly present when the US wants to do US things in the region. Which is rarely “policing” it, and more about having strong influence. I’m not going to judge whether or not the US should keep a strong geopolitical presence in the world or not, but if you don’t, someone else will probably do it instead making. I know a lot of Americans don’t think of the soft power and influence you guys have around the globe through your hard power, but it would be a very different world if you gave it up.
- MonitorBird 3y ago[flagged]
- deleted 3y ago[deleted]
- A4ET8a8uTh0 3y agoIt is interesting ( and a little scary ), because we are very much on a path that could easily unravel existing status quo ( and yes, overall as a beneficiary of it, I would it to mostly stay as it is ). Why I say it is interesting? The article is from WSJ, which has rather specific target audience in mind ( not me ). The fact that it is recognized as a real problem suggests that it may no longer be a can that can be easily kicked down the road ( and FED is unlikely to make adjustments to help that situation either ). Note that it will likely serve as a call for austerity with social security and medicare taking the brunt of it ( the chart will serve as a clear indicator that it is the real culprit ) along with a message to anyone who suggests otherwise: 'we have a war coming up yo; you don't want to cut defense spending'. It is all rather depressing, because it is predictable and was avoidable. Now, and I harped on this for a while, we have only a set of really difficult decisions ahead ( raising taxes AND cutting services ). No one will like this.
- ta1243 3y ago> Now, and I harped on this for a while, we have only a set of really difficult decisions ahead ( raising taxes AND cutting services ). No one will like this. The value of America's largest 500 companies (or whatever the S&P is) has increased by $6T in the last 12 months, $16T in the last 5 years. This is talking about $1T of payments over the next 10 years, or $100b a year -- well under 5% of the gains that America's companies have increased in value solely because of an American Hegemony led world leading to such stability.
- A4ET8a8uTh0 3y agoBut this 'value' does not address the underlying issue unless you are suggesting that it is just a question of carving out that value for the purpose of debt payment. Am I misreading something?
- wongarsu 3y agoSo you are saying America should raise taxes on the S&P500 (or their shareholders) so the government can pay for providing this insane value?
- 3y ago
- howeyc 3y ago[flagged]
- corecpi 3y agoHello I'm up 8%, you should pay attention
- dupertrooper 3y agoYes finally we have the inflation levels still lower than the entire Baby Boomer period! How will we deal with regular people getting money again!
- Thorrez 3y agoThis page says 3.9% YoY. https://www.investing.com/economic-calendar/core-cpi-736 https://www.investing.com/economic-calendar/core-cpi-736
- howeyc 3y agoI said real wage growth. You likely thought I said nominal wage growth. Or maybe you learned something new today.
- ta1243 3y ago[flagged]
- bedhead 3y agoWe live beyond our means. It won’t end well.
- black_13 3y ago[dead]
- screenothethird 3y ago[dead]
- daniel-cussen 3y ago[dead]
- screenothethird 3y ago[dead]
- cuckatoo 3y agoTurns out the same dumb people that max out their credit cards are also the ones running the country. Surprise!
- fallingknife 3y agoIn a democracy the leadership will resemble its population
- azemetre 3y agoI’d believe this argument if the house of representatives wasn’t capped and DC became a state.
- smileysteve 3y agoInclusive the same people that bankrupted casinos and utilize on public funding of baseball stadiums.
- metricspaces 3y agoplot thickens: the people who own the banks fund the dumb people who borrow from the banks to buy guns from the MIC who the very same people who own the banks and the press also own.
- beej71 3y agoBut it also seems like people with great personal wealth are the ones running the country.
- bjnewman85 3y agoYeah man, our government borrows money. We used it to build the largest economy in the world. Now we continue to do that, but we also send part of the money our government borrows to people all around the world. In exchange for this ultra stable source of revenue backed by the wealth of our current and future taxpayers and our military, they might forgive us for all the horrible things we have done.
- smileysteve 3y agoMore important than foreign aid is a huge defense budget and an 20 year occupation.
- fallingknife 3y agoBut we aren't using it to build the economy. We are mostly using it to pay interest and entitlement payments.
- Hucklederry 3y ago[flagged]
- xyzzy4747 3y agoThe interest payments go into the pockets of entities or people who then use it to spend in the global economy. So the interest alone isn’t an issue from a macro economic perspective.
- howeyc 3y agoThis is correct. Interest payments go into bank accounts. Some of that money gets spent into the economy, some stays and gets reinvested into more treasuries. There's a reason real GDP growth is higher than it's usually been, money is being injected into the economy via interest payments.
- Timber-6539 3y agoNothing to see here. The AI boom will defuse this time bomb.
- jcfrei 3y agoNot surprising given the inflation reduction act spends an additional $891 billion and the Chips act which adds another $280B to the governments debt - taken together about 19% of the usual yearly federal expenditure. It also contributed to the high government debt to GDP ratio of 144% - for comparison the EU is at 81%. It's quite a gamble by the Biden administration - if it creates lots of flourishing businesses it will be well worth it. But if a lot of the funded ventures collapse after the money is spent then this additional debt will be a burden for the American taxpayer for quite some time.
- username332211 3y ago> It's quite a gamble by the Biden administration - if it creates lots of flourishing businesses it will be well worth it. But if a lot of the funded ventures collapse after the money is spent then this additional debt will be a burden for the American taxpayer for quite some time. Both will happen. First, businesses will expand to absorb the subsidies, then over time their assets will be sold to private equity to be destroyed. Why run a business that earns 7% ROI, when you can get 5% risk free from the treasury?
- madaxe_again 3y agoHere’s TFA for anyone without a sub https://archive.ph/mbz1p https://archive.ph/mbz1p My take… Treasuries yield based on desirability and confidence. If either confidence or desirability are low, yields go up, in order to make them a more attractive investment. Currently, confidence seems to be about the same as ever - the U.S. defaulting is as unlikely as it ever was - however desirability is down, as since the pandemic retail ETFs and equities have exploded in popularity, and bonds are pretty unsexy instruments at the best of times - so the yield goes up to try to attract investors. Of course, there’s also interest rates going up and inflation to factor in, however inflation doesn’t really change the picture when you’re the one printing the money, as while it pushes absolute figures up the devaluation is commensurate. So, all in all, this should actually be read as “in absolute terms, the defence budget has shrunk” - which is kinda true, kinda not, as quite a bit of what once sat under defence now sits under various discretionary spending schemes rather than “money for the DoD”.
- Simulacra 3y agoThe unregulated printing of dollars has consequences. Whether it's for Ukraine, or for pandemic stimulus checks. There's no such thing as free money.
- simonblack 3y agoIt's called arithmetic. There is no escape.