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This was a mind shift for me, inflation applies to stock prices too. The US cannot cut spending enough to prevent the debt death spiral. Inflation and growth ar

This was a mind shift for me, inflation applies to stock prices too. The US cannot cut spending enough to prevent the debt death spiral. Inflation and growth are the only options. Everyone wants growth but it's hard to get, nobody wants inflation, but it's easy to get. Inflation is here to stay.

JumpCrisscross 1y ago
> US cannot cut spending enough to prevent the debt death spiral. Inflation and growth are the only options Inflation, growth and defaults. Trump has already de facto seized, and the Republicans in the Congress ceded, the power of the purse. Do you really think impounding interest payments is beyond the pale of possibility?
- eagerpace 1y ago
  It's not a partisan thing. Congress is too dysfunctional. Both sides oppose a balanced budget.
  - bediger4000 1y ago
    I'm the past, Congress was able to prevent impoundments. Given the cult like nature of the current majority, the current situation is not "both sides".
  - rootusrootus 1y ago
    > Both sides oppose a balanced budget. A balanced budget is a popular idea in theory, but very few people actually want to see it happen once they find out what their own cost will be. The politicians are going to do whatever it takes to mollify voters and keep their jobs.
    - deleted 1y ago
      [deleted]
  - watwut 1y ago
    When Republicans blow up budget way more then anyone before, it is both sides. When Democrats leave surplus or just lower speed at which debt goes up ... debt is still their fault.
  - analognoise 1y ago
    This seems a bit too “both sides” for my taste, given Trump being a disaster for America.
- quickthrowman 1y ago
  > Do you really think impounding interest payments is beyond the pale of possibility? I truly hope so, otherwise the only buyers for US Treasuries will be Social Security. Defaulting on sovereign US debt would be something that would make me rapidly look for an exit from the United States.
  - RealityVoid 1y ago
    Looks like you guys are trying really hard to recreate the french revolution.
- xnx 1y ago
  > Do you really think impounding interest payments is beyond the pale of possibility? It will happen in phases: 30 year bonds become 100 year bonds, foreign countries get payments, delayed, etc.
Dylan16807 1y ago
> Inflation is here to stay. Well sure it is, we aim for some inflation on purpose. If you mean inflation above 2% is here to stay, maybe, but 2% was an arbitrary target anyway. It doesn't make much difference whether it's around 2% or hovering between 2% and 3%. If you think it's going to go much higher I'd like to hear why.
- tobias3 1y ago
  This right here. If you don't think they will actually hit the 2% target it means inflation became unanchored. It is mainly about credibility. If they want 3% instead of 2%, they should hit the 2% target first, keep it there for a few years, then increase to 3%.
  - Dylan16807 1y ago
    If it's within 1% of target that's not "unanchored".
    - MegaButts 1y ago
      3% is 50% more than 2%, so it's nowhere near being within 1% of the target. I'm not trying to be pedantic, but there is an enormous difference between 1% and 50%. https://xkcd.com/985/ https://xkcd.com/985/
      - Dylan16807 1y ago
        It was clear what I meant so yeah that's pedantry. Precision down to 1% of 2% of prices is impossible. If the target was no change in prices, we wouldn't say inflation is infinity percent off target every month.
- eagerpace 1y ago
  It has to go higher. It’s the only way out of the debt issue. Economic growth isn’t enough given the continued spending. If the inflation can happen alongside growth it is easier to sell.

JumpCrisscross 1y ago

> US cannot cut spending enough to prevent the debt death spiral. Inflation and growth are the only options Inflation, growth and defaults. Trump has already de facto seized, and the Republicans in the Congress ceded, the power of the purse. Do you really think impounding interest payments is beyond the pale of possibility?

eagerpace 1y ago
It's not a partisan thing. Congress is too dysfunctional. Both sides oppose a balanced budget.
- bediger4000 1y ago
  I'm the past, Congress was able to prevent impoundments. Given the cult like nature of the current majority, the current situation is not "both sides".
- rootusrootus 1y ago
  > Both sides oppose a balanced budget. A balanced budget is a popular idea in theory, but very few people actually want to see it happen once they find out what their own cost will be. The politicians are going to do whatever it takes to mollify voters and keep their jobs.
  - deleted 1y ago
    [deleted]
- watwut 1y ago
  When Republicans blow up budget way more then anyone before, it is both sides. When Democrats leave surplus or just lower speed at which debt goes up ... debt is still their fault.
- analognoise 1y ago
  This seems a bit too “both sides” for my taste, given Trump being a disaster for America.
quickthrowman 1y ago
> Do you really think impounding interest payments is beyond the pale of possibility? I truly hope so, otherwise the only buyers for US Treasuries will be Social Security. Defaulting on sovereign US debt would be something that would make me rapidly look for an exit from the United States.
- RealityVoid 1y ago
  Looks like you guys are trying really hard to recreate the french revolution.
xnx 1y ago
> Do you really think impounding interest payments is beyond the pale of possibility? It will happen in phases: 30 year bonds become 100 year bonds, foreign countries get payments, delayed, etc.

Dylan16807 1y ago

> Inflation is here to stay. Well sure it is, we aim for some inflation on purpose. If you mean inflation above 2% is here to stay, maybe, but 2% was an arbitrary target anyway. It doesn't make much difference whether it's around 2% or hovering between 2% and 3%. If you think it's going to go much higher I'd like to hear why.

tobias3 1y ago
This right here. If you don't think they will actually hit the 2% target it means inflation became unanchored. It is mainly about credibility. If they want 3% instead of 2%, they should hit the 2% target first, keep it there for a few years, then increase to 3%.
- Dylan16807 1y ago
  If it's within 1% of target that's not "unanchored".
  - MegaButts 1y ago
    3% is 50% more than 2%, so it's nowhere near being within 1% of the target. I'm not trying to be pedantic, but there is an enormous difference between 1% and 50%. https://xkcd.com/985/ https://xkcd.com/985/
    - Dylan16807 1y ago
      It was clear what I meant so yeah that's pedantry. Precision down to 1% of 2% of prices is impossible. If the target was no change in prices, we wouldn't say inflation is infinity percent off target every month.
eagerpace 1y ago
It has to go higher. It’s the only way out of the debt issue. Economic growth isn’t enough given the continued spending. If the inflation can happen alongside growth it is easier to sell.