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It is the US Government. Nobody has minded funding their schemes since 1970. They're going to keep borrowing until something so terrible happens that they liter

by roenxi 2y ago

It is the US Government. Nobody has minded funding their schemes since 1970. They're going to keep borrowing until something so terrible happens that they literally cannot borrow any more. It is a bipartisan consensus position that spans multiple powerful governing ideologies. Rep. Nicole Malliotakis is much more likely to be using rhetoric than predicting how the situation will develop. If the Republicans as a party actually cared about the debt or intended to make meaningful improvements to the situation we'd have seen evidence of it in the 70s, 80s, 90s, 00s or 10s. I'd love to be wrong, but there is pretty strong evidence here that they're going to tut-tut; maybe wag a finger or even in extreme situations someone will write a strongly worded letter. Then the government will borrow whatever they need to to pay for whatever hare-brained scheme is flavour of the month.

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PaulRobinson 2y ago
The problem here is that gilt rates have been on the rise for a year (most likely as a reaction to Trump's manifesto), meaning borrowing is getting more and more expensive. You can print more money, but that devalues the currency, which the USD has managed to shirk off by being the main reserve currency of the planet. Except, that might change soon - because of the seeming chaos of the Trump administration (based on experiences of the previous administration), people are eyeing up EUR as a safer place, and gold prices are moving in a direction that suggests people want out of dollars (even if gold is normally denominated in USD for most people). Trump has therefore caused gilt rates to rise, borrowing costs to rise, and a potential currency devaluation. If you want to see how that works out when people finally lose their confidence, see what happened to the Truss government in the UK: it's not pretty. The UK is still paying for that on multiple fronts, but we were able to end the experiment in 49 days - that's not possible in the US. I don't think what has worked for the last 50 years - waving budget appropriations through, shrugging at the national debt - is going to hold up for too much longer, for multiple reasons. And when it falls, it's going to fall fast, and very hard.

by roenxi 2y ago

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PaulRobinson 2y ago

The problem here is that gilt rates have been on the rise for a year (most likely as a reaction to Trump's manifesto), meaning borrowing is getting more and more expensive. You can print more money, but that devalues the currency, which the USD has managed to shirk off by being the main reserve currency of the planet. Except, that might change soon - because of the seeming chaos of the Trump administration (based on experiences of the previous administration), people are eyeing up EUR as a safer place, and gold prices are moving in a direction that suggests people want out of dollars (even if gold is normally denominated in USD for most people). Trump has therefore caused gilt rates to rise, borrowing costs to rise, and a potential currency devaluation. If you want to see how that works out when people finally lose their confidence, see what happened to the Truss government in the UK: it's not pretty. The UK is still paying for that on multiple fronts, but we were able to end the experiment in 49 days - that's not possible in the US. I don't think what has worked for the last 50 years - waving budget appropriations through, shrugging at the national debt - is going to hold up for too much longer, for multiple reasons. And when it falls, it's going to fall fast, and very hard.