4 ms·

I suspect our financial system will finally collapse when the United States government is no longer capable of borrowing fast enough to pay off/refinance all ou

by jarbus 2y ago

I suspect our financial system will finally collapse when the United States government is no longer capable of borrowing fast enough to pay off/refinance all our debts and eventually defaults due to lack of available manpower

vundercind 2y ago
Likely be a while. Several countries with worse public-debt-to-gdp ratios and their financial systems haven’t collapsed. Wouldn’t be surprised if we see nuclear war before it happens so it kinda becomes moot.
ochoseis 2y ago
Luckily we can print the currency the debt is borrowed in.
- chii 2y ago
  and that will really turn on the hyperinflation tap.
- torstenvl 2y ago
  We can't. The Federal Government can. We and the Federal Government have exactly opposite incentives on this issue.
- ein0p 2y ago
  And getting people to buy into this Ponzi scheme is getting more and more expensive. Hence the ballooning interest payments. As debt reaches maturity, more and more of it will have to be refinanced at a higher “apr”, since nobody is even contemplating drawing down the principal. This could further drive up the rates.
arrosenberg 2y ago
The US money supply is property of the US Treasury. Congress just needs to call those puppies home by increasing taxes and aggressively pursuing illicit and off-shored wealth.
- s1artibartfast 2y ago
  There is only so much that taxes can be increased. Tax revenue is currently >40% of GDP.
  - arrosenberg 2y ago
    Per wikipedia, as of 2020 it's 27% and France is at 46%, so it looks like we have a ways to go - https://en.wikipedia.org/wiki/List_of_sovereign_states_by_tax_revenue_to_GDP_ratio https://en.wikipedia.org/wiki/List_of_sovereign_states_by_ta...
    - s1artibartfast 2y ago
      I dont think the US numbers are comprehensive and include state and local tax collection. Different Nations have radically different taxation schemes and reporting. for example, 2022 federal revenue was 4.4T, states were 3.7T and local was 1.6T
      - arrosenberg 2y ago
        FRED has SALT revenues around 2.038T[1] in 2023. It looks like about 1.5T is State. This seems to be up 25-35% over historic averages when adjusted for inflation. It has spiked in the last 2 years for reasons I'm not clear on. FRED also had Federal Receipts at about 17% of GDP [2] between the Trump and Biden terms, which seems average. This was preceded by 15 years of below-average receipts (by this metric) during Bush43 and Obama. Maybe your data source is more accurate than the fed? Otherwise, it seems like there is plenty more room to tax. It also very clearly matters who you tax. The poor and middle class are mostly tapped, but JP Bezos and big private finaceers have way too much and could stand to be taxed much harder. [1] - https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT1USNO#0 https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT1USNO#0 [2] - https://fred.stlouisfed.org/series/FYFRGDA188S#0 https://fred.stlouisfed.org/series/FYFRGDA188S#0
        s1artibartfast 2y ago

by jarbus 2y ago

vundercind 2y ago

Likely be a while. Several countries with worse public-debt-to-gdp ratios and their financial systems haven’t collapsed. Wouldn’t be surprised if we see nuclear war before it happens so it kinda becomes moot.

ochoseis 2y ago

Luckily we can print the currency the debt is borrowed in.

chii 2y ago
and that will really turn on the hyperinflation tap.
torstenvl 2y ago
We can't. The Federal Government can. We and the Federal Government have exactly opposite incentives on this issue.
ein0p 2y ago
And getting people to buy into this Ponzi scheme is getting more and more expensive. Hence the ballooning interest payments. As debt reaches maturity, more and more of it will have to be refinanced at a higher “apr”, since nobody is even contemplating drawing down the principal. This could further drive up the rates.

arrosenberg 2y ago

The US money supply is property of the US Treasury. Congress just needs to call those puppies home by increasing taxes and aggressively pursuing illicit and off-shored wealth.

s1artibartfast 2y ago
There is only so much that taxes can be increased. Tax revenue is currently >40% of GDP.
- arrosenberg 2y ago
  Per wikipedia, as of 2020 it's 27% and France is at 46%, so it looks like we have a ways to go - https://en.wikipedia.org/wiki/List_of_sovereign_states_by_tax_revenue_to_GDP_ratio https://en.wikipedia.org/wiki/List_of_sovereign_states_by_ta...
  - s1artibartfast 2y ago
    I dont think the US numbers are comprehensive and include state and local tax collection. Different Nations have radically different taxation schemes and reporting. for example, 2022 federal revenue was 4.4T, states were 3.7T and local was 1.6T
    - arrosenberg 2y ago
      FRED has SALT revenues around 2.038T[1] in 2023. It looks like about 1.5T is State. This seems to be up 25-35% over historic averages when adjusted for inflation. It has spiked in the last 2 years for reasons I'm not clear on. FRED also had Federal Receipts at about 17% of GDP [2] between the Trump and Biden terms, which seems average. This was preceded by 15 years of below-average receipts (by this metric) during Bush43 and Obama. Maybe your data source is more accurate than the fed? Otherwise, it seems like there is plenty more room to tax. It also very clearly matters who you tax. The poor and middle class are mostly tapped, but JP Bezos and big private finaceers have way too much and could stand to be taxed much harder. [1] - https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT1USNO#0 https://fred.stlouisfed.org/series/QTAXTOTALQTAXCAT1USNO#0 [2] - https://fred.stlouisfed.org/series/FYFRGDA188S#0 https://fred.stlouisfed.org/series/FYFRGDA188S#0
      - s1artibartfast 2y ago