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> The debt to GDP levels are fairly middling against other developing countries Doom is about the future, not the present. Why are you looking at present level

> The debt to GDP levels are fairly middling against other developing countries Doom is about the future, not the present. Why are you looking at present levels instead of where the trend is taking us in the future?

omgwtfbyobbq 2y ago
It can also be about the past. That's one problem with looking at charts that aren't indexed/real (inflation adjusted) and/or ratios. On it's face, our debt looks scary. https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN Looking at it as a ratio, it's still not great, but we've been in similar places in the past. Debt as a percentage of GDP. https://fred.stlouisfed.org/series/GFDGDPA188S https://fred.stlouisfed.org/series/GFDGDPA188S Interest as a percentage of GDP. https://fred.stlouisfed.org/series/FYOIGDA188S https://fred.stlouisfed.org/series/FYOIGDA188S
- tuatoru 2y ago
  It's a bit of a stretch to call 1946 a similar place. In 1946 there was a lot of pent-up demand for housing and consumer durables and a young fast-growing population. Now, not so much. It's also a stretch to call 1990 a similar place for similar reasons. We really are in a never-before-seen place with our current population age structure (old age dependency ratio) and fertility rates.
  - omgwtfbyobbq 2y ago
    I think there are some similarities. There's also a lot of demand for housing now, but it's mostly for affordable housing. Most housing was affordable after WWII, compared to now when a lot of housing isn't affordable. Population growth has slowed, but there's a good chance it would increase if affordable housing was available. We are in a unique place now, and I think we were in 1946 too. I'm not saying everything will be fine, but I don't think it benefits us to say that this is uncharted territory either.
- f38zf5vdt 2y ago
  The US has been in similar places during a world war where they were asserting global dominance. It appears there is no further reasonable headroom for debt should a third world war break out -- the Americans will be up "shit creek without a paddle". In that scenario, roaring inflation would destroy whatever is left of the current economy as globalist trade routes collapse. The recent wars and posturings of Western rivals (Iran, China, Russia) are no surprise. They are sharks circling what they perceive as a failing economic system in a winner-takes-all game.
  - omgwtfbyobbq 2y ago
    I think that's accurate to some degree. If global economic trade were to shut down, it would significantly increase prices because a lot of resource extraction/processing and factories would have you relocate to North America. That has already happened to some degree with Russia/Ukraine. I wouldn't characterize what Iran, North Korea, and Russia is doing as sharks circling a failed US economic system. Russia making a play for control of Ukraine and control of FF/agricultural production/exports, is more about their economic reliance on on FF exports/etc and the West moving towards renewables. The fact that they're willing to throw away so much of their military and population on it shows how much of a threat they think it is. It could also be because of a perceived threat from NATO, but if that was the case they would have backed off when other countries started taking about joining NATO. Instead they doubled down and NATO is more powerful than it was before. Iran and North Korea and using their resources to support Russia in exchange for technology/etc. China is making moves to strengthen their economy during all of this, but I think they're acting as opportunistic towards Russia as they are towards the West. That's why they're being really heavy handed in negotiations with Russia. They know there isn't anywhere else for Russia to sell a lot of it's gas, and they see this as an opportunity to gain an advantage over Russia. https://www.reuters.com/business/energy/russia-china-gas-pipeline-deal-stalls-over-beijings-price-demands-ft-2024-06-02/ https://www.reuters.com/business/energy/russia-china-gas-pip...

omgwtfbyobbq 2y ago

It can also be about the past. That's one problem with looking at charts that aren't indexed/real (inflation adjusted) and/or ratios. On it's face, our debt looks scary. https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN Looking at it as a ratio, it's still not great, but we've been in similar places in the past. Debt as a percentage of GDP. https://fred.stlouisfed.org/series/GFDGDPA188S https://fred.stlouisfed.org/series/GFDGDPA188S Interest as a percentage of GDP. https://fred.stlouisfed.org/series/FYOIGDA188S https://fred.stlouisfed.org/series/FYOIGDA188S

tuatoru 2y ago
It's a bit of a stretch to call 1946 a similar place. In 1946 there was a lot of pent-up demand for housing and consumer durables and a young fast-growing population. Now, not so much. It's also a stretch to call 1990 a similar place for similar reasons. We really are in a never-before-seen place with our current population age structure (old age dependency ratio) and fertility rates.
- omgwtfbyobbq 2y ago
  I think there are some similarities. There's also a lot of demand for housing now, but it's mostly for affordable housing. Most housing was affordable after WWII, compared to now when a lot of housing isn't affordable. Population growth has slowed, but there's a good chance it would increase if affordable housing was available. We are in a unique place now, and I think we were in 1946 too. I'm not saying everything will be fine, but I don't think it benefits us to say that this is uncharted territory either.
f38zf5vdt 2y ago
The US has been in similar places during a world war where they were asserting global dominance. It appears there is no further reasonable headroom for debt should a third world war break out -- the Americans will be up "shit creek without a paddle". In that scenario, roaring inflation would destroy whatever is left of the current economy as globalist trade routes collapse. The recent wars and posturings of Western rivals (Iran, China, Russia) are no surprise. They are sharks circling what they perceive as a failing economic system in a winner-takes-all game.
- omgwtfbyobbq 2y ago
  I think that's accurate to some degree. If global economic trade were to shut down, it would significantly increase prices because a lot of resource extraction/processing and factories would have you relocate to North America. That has already happened to some degree with Russia/Ukraine. I wouldn't characterize what Iran, North Korea, and Russia is doing as sharks circling a failed US economic system. Russia making a play for control of Ukraine and control of FF/agricultural production/exports, is more about their economic reliance on on FF exports/etc and the West moving towards renewables. The fact that they're willing to throw away so much of their military and population on it shows how much of a threat they think it is. It could also be because of a perceived threat from NATO, but if that was the case they would have backed off when other countries started taking about joining NATO. Instead they doubled down and NATO is more powerful than it was before. Iran and North Korea and using their resources to support Russia in exchange for technology/etc. China is making moves to strengthen their economy during all of this, but I think they're acting as opportunistic towards Russia as they are towards the West. That's why they're being really heavy handed in negotiations with Russia. They know there isn't anywhere else for Russia to sell a lot of it's gas, and they see this as an opportunity to gain an advantage over Russia. https://www.reuters.com/business/energy/russia-china-gas-pipeline-deal-stalls-over-beijings-price-demands-ft-2024-06-02/ https://www.reuters.com/business/energy/russia-china-gas-pip...