5 ms·

This has been the case for decades now. The US economy is much more dynamic than Europe's and the US government is actually more willing to intervene (and can

This has been the case for decades now. The US economy is much more dynamic than Europe's and the US government is actually more willing to intervene (and can afford it because of US dollar). In Europe it is austerity and general less support for economy-boosting policies.

croes 2y ago
So the US economy is built on debt
- mytailorisrich 2y ago
  Europe has massive debts, too, and growing. But this is a downward spiral. Edit: Average government debt-to-GDP ratio in the EU was around 60% from 2000 to 2008. It is 88% now and worse in many major countries. No lie here...
  - Jensson 2y ago
    > Europe has massive debts, too, and growing This is a lie, take Sweden's debt for example it has been going down the past 20 years. Most of Europe doesn't see increasing debt, USA is an outlier. https://tradingeconomics.com/sweden/government-debt-to-gdp#:~:text=Government%20Debt%20to%20GDP%20in,source%3A%20EUROSTAT https://tradingeconomics.com/sweden/government-debt-to-gdp#:...
    - 0xBDB 2y ago
      Sweden is an outlier. US debt to GDP is 110%. France and the UK 99%. Italy 138%. Greece 203%. Japan 263%. China depends on who you believe, but probably somewhere around 100%.
- stephen_g 2y ago
  All economies are built on debt... It's basically how money works...
  - Jensson 2y ago
    No that is not how money works, it is one way money can work but it isn't how money works. Many economies are debt free, because there is no reason to go into debt to have money.
    - syndicatedjelly 2y ago
      > Many economies are debt free, because there is no reason to go into debt to have money. Is this intentionally facetious? There is NO reason to go into debt? Should we just return to the gold standard then?
      - fifticon 2y ago
        There are also downsides to it. One of the benefits of debt is to have more liquidity. If nobody owed anybody anything, but at the same time it was very difficult to trade with anybody, you would have a very inflexible situation that might not really be preferable. Like if I'm sitting with goods you want, and you sit with goods I want, but we have no way to swap them, then we are both worse off.
      - jokethrowaway 2y ago
        The gold standard is not perfect but it's definitely better than what we have now. My ideal pick would be using the price of a basket of common commodities (wood, iron, wheat); pay the bank for storing your goods and don't let state actors & friends steal your money with inflation. I don't think BTC is the solution (it's unbacked) but wtfhappenedin1971.com has some good reading material.
    - programjames 2y ago
      Isn't it better to have an economy based on debt than something people actually want or need? E.g. if we had a currency based on land, housing prices would soar even more than they already are at.
    - 0xBDB 2y ago
      Money is debt. Green (or whatever color) slips of paper aren't intrinsically valuable. They're a promise to redeem them for things that are, same as an IOU. I take your point that not every economy is run by a government that owes 110% of GDP. But Japan and China are, and France and the UK are at 99%, so that doesn't seem to be the whole secret of America's success.
tossandthrow 2y ago
There are a lot of perspectives. Eg. that the US due to it geopolitical situation hasn't seen any real adverse events in the past century. Ie. privileged on the risk side. As other people also mention: The US' growth seems to be debt driven, which will also have to halt at some point. However, it would not seem like it is US dynanisism that is the reason for the current success of the country - especially taken into account that it is a small subset (eg. the magnificent 7) and very high valuations that drive the current success. All in all, my personal view is that there is significant risk in the US market currently - thus also high returns. But I do think that it is safer to harbour some money outside of the US. Personally, I am happy to have US stocks in my portfolio, I am also happy not to live there.

croes 2y ago

So the US economy is built on debt

mytailorisrich 2y ago
Europe has massive debts, too, and growing. But this is a downward spiral. Edit: Average government debt-to-GDP ratio in the EU was around 60% from 2000 to 2008. It is 88% now and worse in many major countries. No lie here...
- Jensson 2y ago
  > Europe has massive debts, too, and growing This is a lie, take Sweden's debt for example it has been going down the past 20 years. Most of Europe doesn't see increasing debt, USA is an outlier. https://tradingeconomics.com/sweden/government-debt-to-gdp#:~:text=Government%20Debt%20to%20GDP%20in,source%3A%20EUROSTAT https://tradingeconomics.com/sweden/government-debt-to-gdp#:...
  - 0xBDB 2y ago
    Sweden is an outlier. US debt to GDP is 110%. France and the UK 99%. Italy 138%. Greece 203%. Japan 263%. China depends on who you believe, but probably somewhere around 100%.
stephen_g 2y ago
All economies are built on debt... It's basically how money works...
- Jensson 2y ago
  No that is not how money works, it is one way money can work but it isn't how money works. Many economies are debt free, because there is no reason to go into debt to have money.
  - syndicatedjelly 2y ago
    > Many economies are debt free, because there is no reason to go into debt to have money. Is this intentionally facetious? There is NO reason to go into debt? Should we just return to the gold standard then?
    - fifticon 2y ago
      There are also downsides to it. One of the benefits of debt is to have more liquidity. If nobody owed anybody anything, but at the same time it was very difficult to trade with anybody, you would have a very inflexible situation that might not really be preferable. Like if I'm sitting with goods you want, and you sit with goods I want, but we have no way to swap them, then we are both worse off.
    - jokethrowaway 2y ago
      The gold standard is not perfect but it's definitely better than what we have now. My ideal pick would be using the price of a basket of common commodities (wood, iron, wheat); pay the bank for storing your goods and don't let state actors & friends steal your money with inflation. I don't think BTC is the solution (it's unbacked) but wtfhappenedin1971.com has some good reading material.
  - programjames 2y ago
    Isn't it better to have an economy based on debt than something people actually want or need? E.g. if we had a currency based on land, housing prices would soar even more than they already are at.
  - 0xBDB 2y ago
    Money is debt. Green (or whatever color) slips of paper aren't intrinsically valuable. They're a promise to redeem them for things that are, same as an IOU. I take your point that not every economy is run by a government that owes 110% of GDP. But Japan and China are, and France and the UK are at 99%, so that doesn't seem to be the whole secret of America's success.

tossandthrow 2y ago

There are a lot of perspectives. Eg. that the US due to it geopolitical situation hasn't seen any real adverse events in the past century. Ie. privileged on the risk side. As other people also mention: The US' growth seems to be debt driven, which will also have to halt at some point. However, it would not seem like it is US dynanisism that is the reason for the current success of the country - especially taken into account that it is a small subset (eg. the magnificent 7) and very high valuations that drive the current success. All in all, my personal view is that there is significant risk in the US market currently - thus also high returns. But I do think that it is safer to harbour some money outside of the US. Personally, I am happy to have US stocks in my portfolio, I am also happy not to live there.