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“Debt: the first 5000 years” is an interesting read that addresses your question. In short the author argues that debt- especially government/country level debt

“Debt: the first 5000 years” is an interesting read that addresses your question. In short the author argues that debt- especially government/country level debt- is good for the country issuing the debt and bad/a liability for the country who owns the debt. In other words, the more we “owe” China, the better off we are and the worse off China is. It’s sort of like that saying “if you owe the bank 100 it’s your problem, if you owe the bank $1,000,000, it’s their problem”. Same thing. “We” can “owe” China a billion trillion trillion dollars, but it’s all abstract. What will China do if we don’t pay? How do they call in that debt? We used their money to build the best navy in the world. If we equate the national debt to a single person with $100k in credit card debt, the reality isn’t all that bleak. He declares bankruptcy, gets to keep his house and car, and some or all of the shit he bought with the $100k… only thing is his “score” is low for 7 years. If America were to do the same, I don’t know that anything different would happen. Some countries would stop lending to us. Some third world countries probably don’t have a choice but to lend to us. That might cause inflation or hyper-inflation since the U.S. Dollar would be devalued internationally. At the same time, if the president decided there were WMDs in Russia or Africa, we may suddenly find ourselves relieved from economic burden through conquest (like what Russia is trying to do). No one wants to sell us oil? No problem, we’ll invade The Congo or Russia. Japan had a similar situation in WWII- they in part invaded other countries for their resources. Nazi Germany as well. Two cases of the economy going in the shitter and the answer being war. But now it’s not some rinky-dink island nation or once-bitten-twice-shy Germany- it’s the United fucking States.

seanmcdirmid 3y ago
Most of US debt is owed to US people's. Primarily, social security. Are we just going to be screwed in retirement? China holds a small part of the debt, in treasuring bonds that they can roll over or not into new T-bills. It is more about keeping dollars from heating up their market than a need to lend money. They can simply stop doing that if the Americans decide they don't want to honor T-bills anymore, but I'm not sure what that gets us?
- gymbeaux 3y ago
  Social Security was a great idea in post-depression times. I don’t think it would ever pass today- one, because so many Americans lack empathy(1) and two, because there are better systems that have been proven to work over time in countries like Sweden. The problem, as is so often the case these days, is that Republicans run their excellent propaganda machine to try to strike down social security retirement, Medicare/medicaid and food stamps without a replacement. “We don’t need a replacement!” Democrats, playing their part, are asleep at the wheel, and instead of proposing a revamp of the system to align with modern socialism (eg UBI), they simply want to kick the can down the road and keep everything as it is. (1) https://jspp.psychopen.eu/index.php/jspp/article/view/5209/5209.html https://jspp.psychopen.eu/index.php/jspp/article/view/5209/5...
  - seanmcdirmid 3y ago
    SS is easy to fix by just lifting the income cap on it and making it more progressive. But Republicans aren't going to do that, I guess. Even today if you retire on SS alone, that's basically welfare that you paid for, it isn't really enough to live but might prevent you from starving to death. Thankfully, our life expectancies aren't rising so fast anymore (and actually falling a bit), or we would have a huge problem (forgive the dark humor).
    - giantg2 3y ago
      "SS is easy to fix by just lifting the income cap on it and making it more progressive." That's kind of a loaded statement. Just eliminating the cap can strengthen the system, but won't fully fix it. We could fix any deficit by increasing taxes enough (eg making it more progressive). I would potentially support removing the cap, but I would want to see changes around capital gains taxation before making the tax more progressive. I think most of the deficit fixes should be through actual tax architecture changes (capital gains, AMT/deduction, etc) vs just increasing rates or adding higher brackets. "it isn't really enough to live but might prevent you from starving to death." I believe the benefits have decreased in real value over time. However, it was originally intended to prevent people (mostly widows, children, and elderly) from starving. It wasn't designed to be a sole retirement program - people were expected to save or buy bonds. This is a similar type of thing for other retirement topics - like the 401k was originally meant to be supplimental. Most people in the US are extremely poorly prepared for retirement for a variety of reasons.

seanmcdirmid 3y ago

Most of US debt is owed to US people's. Primarily, social security. Are we just going to be screwed in retirement? China holds a small part of the debt, in treasuring bonds that they can roll over or not into new T-bills. It is more about keeping dollars from heating up their market than a need to lend money. They can simply stop doing that if the Americans decide they don't want to honor T-bills anymore, but I'm not sure what that gets us?

gymbeaux 3y ago
Social Security was a great idea in post-depression times. I don’t think it would ever pass today- one, because so many Americans lack empathy(1) and two, because there are better systems that have been proven to work over time in countries like Sweden. The problem, as is so often the case these days, is that Republicans run their excellent propaganda machine to try to strike down social security retirement, Medicare/medicaid and food stamps without a replacement. “We don’t need a replacement!” Democrats, playing their part, are asleep at the wheel, and instead of proposing a revamp of the system to align with modern socialism (eg UBI), they simply want to kick the can down the road and keep everything as it is. (1) https://jspp.psychopen.eu/index.php/jspp/article/view/5209/5209.html https://jspp.psychopen.eu/index.php/jspp/article/view/5209/5...
- seanmcdirmid 3y ago
  SS is easy to fix by just lifting the income cap on it and making it more progressive. But Republicans aren't going to do that, I guess. Even today if you retire on SS alone, that's basically welfare that you paid for, it isn't really enough to live but might prevent you from starving to death. Thankfully, our life expectancies aren't rising so fast anymore (and actually falling a bit), or we would have a huge problem (forgive the dark humor).
  - giantg2 3y ago
    "SS is easy to fix by just lifting the income cap on it and making it more progressive." That's kind of a loaded statement. Just eliminating the cap can strengthen the system, but won't fully fix it. We could fix any deficit by increasing taxes enough (eg making it more progressive). I would potentially support removing the cap, but I would want to see changes around capital gains taxation before making the tax more progressive. I think most of the deficit fixes should be through actual tax architecture changes (capital gains, AMT/deduction, etc) vs just increasing rates or adding higher brackets. "it isn't really enough to live but might prevent you from starving to death." I believe the benefits have decreased in real value over time. However, it was originally intended to prevent people (mostly widows, children, and elderly) from starving. It wasn't designed to be a sole retirement program - people were expected to save or buy bonds. This is a similar type of thing for other retirement topics - like the 401k was originally meant to be supplimental. Most people in the US are extremely poorly prepared for retirement for a variety of reasons.