5 ms·

As U.S. Debt Hits a Worrying Milestone, Washington Barely Notices

31 points by tcp_handshaker 6mo ago

tardedmeme 6mo ago
100% debt-to-GDP sounds like some fundamental threshold when it's actually just a Schelling point. It's 1.00 GDP-years of debt, which is a number with an arbitrary time unit in it (why not GDP-month or GDP-decade?)
- croes 6mo ago
  Yearly income is a usual metric
expedition32 6mo ago
Remember the Tea Party? But yes you don't hear anyone about this because politicians waste no time on things they know they can't fix. DOGE was a fucking embarrassment. In the 1930s the Dutch cabinet knew very well that they likely couldn't keep up neutrality. But they also knew there was no chance in hell that they could build up an army in 3 years that could stop Hitler. So what did they do? Lie to the public and secretly open Canadian bank accounts.
scuff3d 6mo ago
We don't hear anything about it because the Republicans are in charge. If a Democrat was in the White House right now you wouldn't be able to shut Fox News and it's ilk up about how the national debt is a harbinger of doom for the entire country.
SilverElfin 6mo ago
It’s not just US debt that’s a problem. It’s also state level and local level. Every part of our government is spending irresponsibly. A lot of the debt is hidden too. A pension with more future liabilities than it can pay for isn’t going to show up as deficit on this year’s budget. A state putting out bonds may count interest payments in the budget numbers that show up in press conferences, but the actual total debt isn’t talked about much. I’m not sure why anyone expects differently. Politicians corruptly waste money to helping themselves, their careers, their party, and their causes. It’s other people’s money that they are spending. And most of them never had substantial experience in private industry to learn the skills it takes to manage billions of dollars of budget. Governments are far, far more wasteful and inefficient than anyone realizes.
- dangus 6mo ago
  A lot of American waste and spending is due to our incredibly wasteful and short-sighted perception of what urbanism looks like: https://www.strongtowns.org/journal/2020-8-28-the-growth-ponzi-scheme-a-crash-course https://www.strongtowns.org/journal/2020-8-28-the-growth-pon... I very often think about how much money Americans spend just on basic infrastructure needs compared to people who live in places built at a more sensible scale. If I got a job in Arlington Texas right now, I’d first need to load myself up with a car payment and spend 4-5 figures per year just for basic needs like groceries and work, even if I lived within walking distance of that job. Arlington, with a population of over 350,000, has no scheduled route public transportation service. American towns and cities never seem to think about things like like “how many feet of sewer line/streets/utility lines and miles of road do we need for each resident?” or “how much population/economic activity per acre do we need to break even on services?”
  - 15155 6mo ago
    Did you ever consider the idea that not everyone wants to live in the typical "urban" environment? Not having public transportation or high-density housing nearby is a feature and a desirable property. > I’d first need to load myself up with a car payment and spend 4-5 figures per year Also a feature: if you can't afford this, perhaps that isn't the community for you? This is a fairly typical agenda: "I want to spend your money turning your city into something you don't want it to be so some theoretical utopia can be actualized." No matter how much crying and extolling of virtues you do: nothing is going to make me ride the bus. No matter how many "road diets" you impose, no matter how many lanes you kill by dedicating them to buses: I'm not going to ride your bus system. I'll just take my tax dollars (which far exceed that of typical bus ridership) elsewhere. I ride the subway everywhere in NYC, but not every city needs to become NYC.
    - dugidugout 6mo ago
      [dead]
    - ryoshoe 6mo ago
ericpauley 6mo ago
The GDP-relative amount of US debt held by foreign investors has actually gone down on since 2014: https://fred.stlouisfed.org/series/HBFIGDQ188S https://fred.stlouisfed.org/series/HBFIGDQ188S
- deleted 6mo ago
  [deleted]
- incrediblylarge 6mo ago
  Am also casually looking at FRED. RE 2014 decline - do you know why this was? I speculate something to do with the initial invasion of Ukraine / China cycling out of treasuries possibly to buy Russian war bonds or oil. I am purely speculating.
sharts 6mo ago
Why does US debt even matter? Why does GDP even matter? Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants. All these abstractions don’t measure what matters anyway.
- rudedogg 6mo ago
  The abstractions are the veil that make the theft slightly less obvious
- ua709 6mo ago
  > Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants. With such a great plan what could possibly go wrong? https://www.reed.edu/economics/parker/f13/201/cases/Argentina.html https://www.reed.edu/economics/parker/f13/201/cases/Argentin... "Argentina, like many other chronic-inflation economies, went through repeated cycles of hyperinflation followed by attempts at stabilization. A typical cycle in such an inflationary economy begins with acceleration of money creation to accommodate the government's budgetary needs. As inflation accelerates, political pressure to reduce inflation builds, leading to an eventual "monetary reform." Such reforms usually include the introduction of a new currency (which is convenient since inflation has usually moved the nominal prices of goods and services into the thousands, million, billions, or even trillions of units of the old currency) and promises on the part of the government (which is in charge of the budget) and the central bank (which is in charge of issuing money and is often under direct control of the government) to follow rules leading to slower monetary growth in the future."
  - sharts 6mo ago
    MMT is a thing for societies that don’t peg their currencies to another.
incrediblylarge 6mo ago
US cannot default on US debt. It is not possible. World reserve=US does not work the same way. Most politicians know that the debt does not matter, but will use it as a rhetorical device. Does the treasury yield rate matter to the US gov, like the people at the top making the decisions, in any critical sense? I kind of feel like they can control it through policy or the fed, since $USD is literally what the world runs on. So even tho treasury repayments on huge debt amounts now comprise a considerable slice of the budget, and the story is that US cannot afford to support its citizenry, cos they are in debt, I suspect that they could exert far more influence over this if they chose to.
- cosmicgadget 6mo ago
  Couldn't the treasury very literally decide not to pay bond coupon or not return capital? Isn't that why the US treasury has long been considered the safest of investments? Or is this some terminology lawyering that default is a legal term that doesn't apply to a sovereign?
- jfengel 6mo ago
  The yield rate does mater in that it's correlated to inflation. If the yield goes up, investors sell bonds, and prices go up. Modern Monetary Theory says that's OK. You stop the pretense of borrowing, then print as much money as you want. You then control inflation by taxation, and then simply burning the dollars you collect. But the switch from one to the other would be unpleasant, since a lot of bond holders are depending on their bonds being worth more than the purchase price after inflation.

100% debt-to-GDP sounds like some fundamental threshold when it's actually just a Schelling point. It's 1.00 GDP-years of debt, which is a number with an arbitrary time unit in it (why not GDP-month or GDP-decade?)

croes 6mo ago
Yearly income is a usual metric

expedition32 6mo ago

Remember the Tea Party? But yes you don't hear anyone about this because politicians waste no time on things they know they can't fix. DOGE was a fucking embarrassment. In the 1930s the Dutch cabinet knew very well that they likely couldn't keep up neutrality. But they also knew there was no chance in hell that they could build up an army in 3 years that could stop Hitler. So what did they do? Lie to the public and secretly open Canadian bank accounts.

scuff3d 6mo ago

We don't hear anything about it because the Republicans are in charge. If a Democrat was in the White House right now you wouldn't be able to shut Fox News and it's ilk up about how the national debt is a harbinger of doom for the entire country.

SilverElfin 6mo ago

It’s not just US debt that’s a problem. It’s also state level and local level. Every part of our government is spending irresponsibly. A lot of the debt is hidden too. A pension with more future liabilities than it can pay for isn’t going to show up as deficit on this year’s budget. A state putting out bonds may count interest payments in the budget numbers that show up in press conferences, but the actual total debt isn’t talked about much. I’m not sure why anyone expects differently. Politicians corruptly waste money to helping themselves, their careers, their party, and their causes. It’s other people’s money that they are spending. And most of them never had substantial experience in private industry to learn the skills it takes to manage billions of dollars of budget. Governments are far, far more wasteful and inefficient than anyone realizes.

dangus 6mo ago
A lot of American waste and spending is due to our incredibly wasteful and short-sighted perception of what urbanism looks like: https://www.strongtowns.org/journal/2020-8-28-the-growth-ponzi-scheme-a-crash-course https://www.strongtowns.org/journal/2020-8-28-the-growth-pon... I very often think about how much money Americans spend just on basic infrastructure needs compared to people who live in places built at a more sensible scale. If I got a job in Arlington Texas right now, I’d first need to load myself up with a car payment and spend 4-5 figures per year just for basic needs like groceries and work, even if I lived within walking distance of that job. Arlington, with a population of over 350,000, has no scheduled route public transportation service. American towns and cities never seem to think about things like like “how many feet of sewer line/streets/utility lines and miles of road do we need for each resident?” or “how much population/economic activity per acre do we need to break even on services?”
- 15155 6mo ago
  Did you ever consider the idea that not everyone wants to live in the typical "urban" environment? Not having public transportation or high-density housing nearby is a feature and a desirable property. > I’d first need to load myself up with a car payment and spend 4-5 figures per year Also a feature: if you can't afford this, perhaps that isn't the community for you? This is a fairly typical agenda: "I want to spend your money turning your city into something you don't want it to be so some theoretical utopia can be actualized." No matter how much crying and extolling of virtues you do: nothing is going to make me ride the bus. No matter how many "road diets" you impose, no matter how many lanes you kill by dedicating them to buses: I'm not going to ride your bus system. I'll just take my tax dollars (which far exceed that of typical bus ridership) elsewhere. I ride the subway everywhere in NYC, but not every city needs to become NYC.
  - dugidugout 6mo ago
    [dead]
  - ryoshoe 6mo ago

ericpauley 6mo ago

The GDP-relative amount of US debt held by foreign investors has actually gone down on since 2014: https://fred.stlouisfed.org/series/HBFIGDQ188S https://fred.stlouisfed.org/series/HBFIGDQ188S

deleted 6mo ago
[deleted]
incrediblylarge 6mo ago
Am also casually looking at FRED. RE 2014 decline - do you know why this was? I speculate something to do with the initial invasion of Ukraine / China cycling out of treasuries possibly to buy Russian war bonds or oil. I am purely speculating.

sharts 6mo ago

Why does US debt even matter? Why does GDP even matter? Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants. All these abstractions don’t measure what matters anyway.

rudedogg 6mo ago
The abstractions are the veil that make the theft slightly less obvious
ua709 6mo ago
> Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants. With such a great plan what could possibly go wrong? https://www.reed.edu/economics/parker/f13/201/cases/Argentina.html https://www.reed.edu/economics/parker/f13/201/cases/Argentin... "Argentina, like many other chronic-inflation economies, went through repeated cycles of hyperinflation followed by attempts at stabilization. A typical cycle in such an inflationary economy begins with acceleration of money creation to accommodate the government's budgetary needs. As inflation accelerates, political pressure to reduce inflation builds, leading to an eventual "monetary reform." Such reforms usually include the introduction of a new currency (which is convenient since inflation has usually moved the nominal prices of goods and services into the thousands, million, billions, or even trillions of units of the old currency) and promises on the part of the government (which is in charge of the budget) and the central bank (which is in charge of issuing money and is often under direct control of the government) to follow rules leading to slower monetary growth in the future."
- sharts 6mo ago
  MMT is a thing for societies that don’t peg their currencies to another.

incrediblylarge 6mo ago

US cannot default on US debt. It is not possible. World reserve=US does not work the same way. Most politicians know that the debt does not matter, but will use it as a rhetorical device. Does the treasury yield rate matter to the US gov, like the people at the top making the decisions, in any critical sense? I kind of feel like they can control it through policy or the fed, since $USD is literally what the world runs on. So even tho treasury repayments on huge debt amounts now comprise a considerable slice of the budget, and the story is that US cannot afford to support its citizenry, cos they are in debt, I suspect that they could exert far more influence over this if they chose to.

cosmicgadget 6mo ago
Couldn't the treasury very literally decide not to pay bond coupon or not return capital? Isn't that why the US treasury has long been considered the safest of investments? Or is this some terminology lawyering that default is a legal term that doesn't apply to a sovereign?
jfengel 6mo ago
The yield rate does mater in that it's correlated to inflation. If the yield goes up, investors sell bonds, and prices go up. Modern Monetary Theory says that's OK. You stop the pretense of borrowing, then print as much money as you want. You then control inflation by taxation, and then simply burning the dollars you collect. But the switch from one to the other would be unpleasant, since a lot of bond holders are depending on their bonds being worth more than the purchase price after inflation.