3 ms·

Unfortunately, even in games, infinity money can only get you so far.

potato3732842 1y ago
At the end of the day we either reign in the debt or the currency collapses and we're forced to reign in the debt. On a long timeline there is no way to not reign in the debt.
- mullingitover 1y ago
  The US is effectively the world's bank. Everyone saying the US needs to cut its debt is basically saying, "The most successful bank in town needs to stop taking deposits," which seems like bad business for a bank. The debt is just the sum of deposits. The problem isn't the debt, the problem is a lack of imagination/ambition in finding good investments for the capital that's being handed to the US. Saying the debt should be cut is saying "We're terrible at business, don't have good ideas, you all need to find smarter and more responsible people to entrust with your capital. We plan to underachieve."
  - s1artibartfast 1y ago
    banks make money on investing their on their deposits, governments do not.
    - tekla 1y ago
      The US Govt quite famously makes fuck tons of money investing on its debts
      - s1artibartfast 1y ago
        no it doesnt. Intragovernmental debt is an IOU to yourself with interest. The remainder is an IOU to others with interest. Neither is an investment with returns. I dont make money running up my credit card or withdrawing from my retirement and promising to pay it back later
        mullingitover 1y ago
        Here's an example of how the government invests: the government uses the revenue from bonds to build a bridge. That bridge delivers returns on the investment in the form of tolls. These pay back the bonds with interest and continue to pay dividends to the government. Another: the government uses bonds to build core infrastructure for a city. That infrastructure allows businesses to set up shop in the city. The business activity yields tax revenues, which pay back the bonds with interest and continue to pay dividends long term. Multiply that by hundreds of thousands to millions of investments in infrastructure, people, services, etc.
        s1artibartfast 1y ago
        That is common misconception, and far from the norm. Financially productive investments are a negligible part of the budget. 22% Social Security 14% Debt interest. 13% General Health 13% Medicare 13% National Defense 11% income security 5% Veterans Benefits 3% Education 2% Transportation Most is a cost center, not revenue center. Keeping grandma alive isnt an investment. In fact, it incurs even more costs outside the budget. Government spending = investment is a very poor heuristic. Most is simple consumption, the way buying a nice dinner is consumption, not an investment. That isn't to say it cant or shouldn't be done. The point of having money it so be able to enjoy nice things. It is just important to not get lost in the sauce and forget the difference. Someone is always ready to argue a nice dinner is an investment because you cant work tomorrow without food. That makes it an expense.
        mullingitover 1y ago
        (Nitpick: Bond revenues don't pay Social Security, Social Security pays Social Security. Bonds are actually bought with Social Security revenues.) The rest of these investments in the citizenry do pay dividends. Not every investment is a simple matter of buying something which spits out money immediately. Spending on health and education is a long-term investment which returns higher tax revenues. Paying for national defense and caring for veterans is simply paying ourselves, that money continues circulating and yielding tax revenues. Even debt interest is paying ourselves! Most of the debt is internal, which just circulates the money around in the economy. Only something like 20% of debt is foreign owned, and that revenue still often comes back to us in to form of rolled-over bond purchases and trade. In closing, the national debt is only a problem when we stop circulating currency. We can make the debt a huge problem by suddenly slashing productive investments in the deluded belief that we're a poor family which has racked up a big credit card bill.
SoftTalker 1y ago
The bonds have a face value and a rate. That is what has to be paid. The fact that the money being used to make the payments might not be worth anything is a risk borne by the bond holders, but there will be no default. However, if this becomes apparent, it will become increasingly difficult to find buyers for new bond issues.
- Iwan-Zotow 1y ago
  Rollover will stop working. New debt issued to retire old debt
- A4ET8a8uTh0_v2 1y ago
  << there will be no default. Heh. You have a point on a technicality, but I can assure you that people, who lend other people money would likely be a lot less technical about it. In other words, the default may be a shorthand for 'immediately unable to borrow more at the previous rate', but I suppose it is not as catchy.

At the end of the day we either reign in the debt or the currency collapses and we're forced to reign in the debt. On a long timeline there is no way to not reign in the debt.

mullingitover 1y ago
The US is effectively the world's bank. Everyone saying the US needs to cut its debt is basically saying, "The most successful bank in town needs to stop taking deposits," which seems like bad business for a bank. The debt is just the sum of deposits. The problem isn't the debt, the problem is a lack of imagination/ambition in finding good investments for the capital that's being handed to the US. Saying the debt should be cut is saying "We're terrible at business, don't have good ideas, you all need to find smarter and more responsible people to entrust with your capital. We plan to underachieve."
- s1artibartfast 1y ago
  banks make money on investing their on their deposits, governments do not.
  - tekla 1y ago
    The US Govt quite famously makes fuck tons of money investing on its debts
    - s1artibartfast 1y ago
      no it doesnt. Intragovernmental debt is an IOU to yourself with interest. The remainder is an IOU to others with interest. Neither is an investment with returns. I dont make money running up my credit card or withdrawing from my retirement and promising to pay it back later
      - mullingitover 1y ago
        Here's an example of how the government invests: the government uses the revenue from bonds to build a bridge. That bridge delivers returns on the investment in the form of tolls. These pay back the bonds with interest and continue to pay dividends to the government. Another: the government uses bonds to build core infrastructure for a city. That infrastructure allows businesses to set up shop in the city. The business activity yields tax revenues, which pay back the bonds with interest and continue to pay dividends long term. Multiply that by hundreds of thousands to millions of investments in infrastructure, people, services, etc.
        s1artibartfast 1y ago
        That is common misconception, and far from the norm. Financially productive investments are a negligible part of the budget. 22% Social Security 14% Debt interest. 13% General Health 13% Medicare 13% National Defense 11% income security 5% Veterans Benefits 3% Education 2% Transportation Most is a cost center, not revenue center. Keeping grandma alive isnt an investment. In fact, it incurs even more costs outside the budget. Government spending = investment is a very poor heuristic. Most is simple consumption, the way buying a nice dinner is consumption, not an investment. That isn't to say it cant or shouldn't be done. The point of having money it so be able to enjoy nice things. It is just important to not get lost in the sauce and forget the difference. Someone is always ready to argue a nice dinner is an investment because you cant work tomorrow without food. That makes it an expense.
        mullingitover 1y ago
        (Nitpick: Bond revenues don't pay Social Security, Social Security pays Social Security. Bonds are actually bought with Social Security revenues.) The rest of these investments in the citizenry do pay dividends. Not every investment is a simple matter of buying something which spits out money immediately. Spending on health and education is a long-term investment which returns higher tax revenues. Paying for national defense and caring for veterans is simply paying ourselves, that money continues circulating and yielding tax revenues. Even debt interest is paying ourselves! Most of the debt is internal, which just circulates the money around in the economy. Only something like 20% of debt is foreign owned, and that revenue still often comes back to us in to form of rolled-over bond purchases and trade. In closing, the national debt is only a problem when we stop circulating currency. We can make the debt a huge problem by suddenly slashing productive investments in the deluded belief that we're a poor family which has racked up a big credit card bill.

SoftTalker 1y ago

The bonds have a face value and a rate. That is what has to be paid. The fact that the money being used to make the payments might not be worth anything is a risk borne by the bond holders, but there will be no default. However, if this becomes apparent, it will become increasingly difficult to find buyers for new bond issues.

Iwan-Zotow 1y ago
Rollover will stop working. New debt issued to retire old debt
A4ET8a8uTh0_v2 1y ago
<< there will be no default. Heh. You have a point on a technicality, but I can assure you that people, who lend other people money would likely be a lot less technical about it. In other words, the default may be a shorthand for 'immediately unable to borrow more at the previous rate', but I suppose it is not as catchy.