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US debt tops $40T as Treasury doubles bond buybacks to calm markets
- NewJazz 2mo agoFed is paring back on open market operations while treasury is moving forward. The treasury buybacks are a pittance, though. This administration seems to be sleep walking into a debt crisis. I guess they think they can hold out long enough to blame it on the other party?
- wredcoll 2mo ago> I guess they think they can hold out long enough to blame it on the other party? Blaming the democrats for republican deficits has worked for the past 40 years, why stop now?
- Freedom2 2mo agoSome people on this site genuinely believe we're still in a Biden economy and when things start to look positive that's when the Trump economy starts, so you're probably right.
- deleted 2mo ago[deleted]
- heyitsmedotjayb 2mo agoCan someone smart tell me how to profit from this if I believe this (plus everything else) is going to spiral into huge crisis?
- datsci_est_2015 2mo agoIf you have to ask, you’re too poor or powerless to properly profit.
- heyitsmedotjayb 2mo agoI'll go and kill myself quietly then
- cucumber3732842 2mo agono, no, no, make sure you spend a lifetime working and paying taxes and implicitly supporting the system first.
- xsmasher 2mo agoHis reply seemed insulting but it's true. Anything you hear about on the news has already been "priced in." Everyone else in the world now has the same idea of what bandwagon to jump on.
- tedggh 2mo agoGenX/Millennial retirement communities abroad. There won’t be any SS funds left for that generation so they won’t be able to retire in the US.
- gedy 2mo agoI hear this a lot, and for decades - yet during this time US debt and spending has exploded, including things like covid stimulus, great recession QE, etc. We happily printed/borrowed/etc but when it comes to social security - gee you're just out of luck, no money left, sorry!
- Camus134 2mo agoIn all seriousness - this level of debt will probably require somewhat high rates of inflation to reduce. I'd expect the inflation baseline to be relatively high over the next few decades. High inflation helps those who borrow with fixed terms. If you have a mortgage, don't pay it off. Don't pay off low interest rate debt. Consider acquiring a responsible amount of low-medium interest rate debt. Put your money into stocks and other assets that will appreciate with inflation.
- wolttam 2mo agoGo ask a (capable, preferably open) LLM. If it doesn’t give you a direct answer it will give you enough of a starting point to start asking more questions. (This is not financial advice)
- NewJazz 2mo agoThe best way to derisk would be to get out of the US and surrender your citizenship. But the alternatives may not be all that much better (France has marginally lower debt to gdp, japan has much higher, to give two examples).
- deleted 2mo ago[deleted]
- naveen99 2mo agoLearn the ways of the kangaroo.
- matteoraso 2mo agoThe uncomfortable reality is that fixing this will require tax hikes AND spending cuts. Not just taxes on people you don't like and spending cuts on niche programs, real changes like a VAT and slashing the VA.
- NewJazz 2mo agoBoth of which can trigger recessions.
- spelk 2mo agoNot paying back US debt triggers a global depression.
- NewJazz 2mo agoIf e.g. taxes are raised, and GDP decreases, it is theoretically possible that net revenues decrease even though tax rates have increased. Or, revenues may increase but the debt to GDP ratio still increases (because the lower GDP) and borrowing costs increase as a result. Note that this means, to me, we need to get our shit together sooner instead of later. A little austerity now may prevent outright default later when significant austerity is forced.
- mgh95 2mo agoThe most effective way is likely not broad-based cuts but targeted cuts to old-age spending via means-testing to induce liquidation of 401(k)s or other savings or tangible property to pay for their own care. I feel the longer (and slower) this trainwreck proceeds, the more likely this outcome is palatable. Roughly 52% of retirees have 250k or more in savings [1]. It is far preferable to drawdown those prior to either cutting benefits or raising taxes. [1] https://www.aarp.org/money/retirement/peak-boomer-readiness/ https://www.aarp.org/money/retirement/peak-boomer-readiness/
- NewJazz 2mo ago
- ergocoder 2mo agoCan somebody explain what this means exactly? Why do they need to pay it back? If they pay it back, then what will happen? I'm from a developing country. My country is objectively much worse than US in every aspect. My country doesn't export anything significant. There's no innovation. insane level of corruption. Yet we don't have this issue. Nobody screams that the country will collapse. Is this kind of doomsday thinking an American-only culture?
- matteoraso 2mo agoThe world economy is based on the idea that America will always repay its debt. Them not paying it back will be the financial equivilent of a nuclear bomb, not just for them, but for literally everybody.
- otterley 2mo agoIt's not just an idea; it's in our Constitution! Fourteenth Amendment, section 4: "The validity of the public debt of the United States...shall not be questioned."
- danielovichdk 2mo agoIt really seems the US is done.
- ChrisArchitect 2mo agoDiscussion: https://news.ycombinator.com/item?id=49366743 https://news.ycombinator.com/item?id=49366743