Please provide data to back up this assertion
American Economics Thread
- Thread starter Bernard
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No amount of tax hikes or money magic will solve a debt this big. And no amount of political will is going to even remote address the policies that created this mess in the first place. You seem to put too much faith in miracles and federal reserve sleight if hand to see that unless the USA solves their problems and fast, all of the various issues in regards to crumbling infrastructure, supply chains breaking apart, dismal foreign policies that is literally convincing the Middle East not to play ball is going to go off all at once to literally place the USA in a position where the dollar simply cannot be used to pay back its debt anymore and the push the USA into a state of hyperinflation which will eventually end in a scenario where society will progressively break down to the point where the nation simply cannot function. Please consider that the USA cannot simply make a few choices where thing will eventually go back to the way it was, it is going to require a literal clean sleight plus all of the current people in charge of leadership right now ushered out to allow for real change and even that wouldn’t be remotely enough
"productivity boom"
"unsnarled supply chains"
"marginally attached members"
I cant tell if this is trolling or if MBAs have actually become retarded enough to write this nonsense.
Governments tend not to "repay" debt, nor is it efficient to do so. The question shouldn't be, "When will United States pay back all this debt?" The question should be, "When will the US economy grow faster than its debt obligations again?"
US debt stood at 63% of GDP in 2007, right before the 2008 recession. Today, that debt stands at 131.5%. This is concerning.
However, just because we are currently doing pretty bad on deficits, on debt, and so on, doesn't mean these trends will remain steady. United States can certainly solve with these issues, but only if there is political will to do so. There is certainly capacity and capability to do so. If you are an American, this state of affairs should worry you. Especially if you believe that there is a conflict brewing, a conflict that we must win at all costs. The current trends are not encouraging.
US debt stood at 63% of GDP in 2007, right before the 2008 recession. Today, that debt stands at 131.5%. This is concerning.
However, just because we are currently doing pretty bad on deficits, on debt, and so on, doesn't mean these trends will remain steady. United States can certainly solve with these issues, but only if there is political will to do so. There is certainly capacity and capability to do so. If you are an American, this state of affairs should worry you. Especially if you believe that there is a conflict brewing, a conflict that we must win at all costs. The current trends are not encouraging.
I read chgough34's posts as satire, it makes perfect sense. Even the "professional" economists in this thread aren't this delusional. Powell can't even drop the interest rate and he's spouting all the nonsense here.
This will likely never happen again. The returns generated from an additional dollar of debt is minuscule, the age of low hanging fruits is over, this LLM AI hype won't save the US either. The US can try to start WWIII, but it likely won't be the winner again.
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Correct. Corporates and governments exist into perpetuity and thus household concepts such as “repay[ing]” don’t exist. Households have a liquidity constraint at the last period of life; the government exists forever so the liquidity constraint doesn’t exist. Principal balances can always be refinanced.
Not even. The main metric for fiscal solvency in corporates is the interest coverage ratio, in the U.S. public finance context, it’s net interest expenses as a share of GDP, which now are ~3%, near historic highs. This is a difficult one to forecast though because of the Fed and its rate-setting magical troll powers
Nothing large will change on the U.S. fiscal trajectory until the early 2030s when trust fund solvency drama will force Congress to act because social security and Medicare are politically important. Until then, it’s just a slow burn of the present unsustainable (but solvable) fiscal situation
On the TCJA - most studies have found null effects from all the tax cuts, even the very conservative Tax Foundation has estimated the tax cuts will only increase long-run gdp by 1.7% - ,
also see this CBO analysis on how capping social security benefits for high income people would come near to solving solvency concerns - and this census paper which linked survey records to tax records to show that survey-based instruments substantially underestimate both income and net worth (savings) of elderly people - the actual income is likely so much higher since 25% of US households have their own business and engage in vaguely legal tax evasion in order to *understate* their income on tax forms. So even though the census surveys substantially underestimated their income compared to tax records, their real incomes are MUCH more underestimated because of tax evasion from creative business accounting and unreported income. (). And net worth for 65-75 y/os is actually higher after the 55-65 age bracket, which means old people, even when they aren’t working are saving substantial sums of money from unspent investment earnings, unrealized capital gains, social security, pensions, cash value life insurance, real estate income, among other sources ().
If government does not need to repay the debt, why do countries default?
Has anyone not considered the fact that the US dollar has lost so much purchasing power in the last 4 years due to endless money printing leading to sticky inflation
Inflation isn't going away any time soon
And the US dollar will also suffer from devaluation once the FED cuts interest rates sending inflation back up.
In short, US economy is doomed
Inflation isn't going away any time soon
And the US dollar will also suffer from devaluation once the FED cuts interest rates sending inflation back up.
In short, US economy is doomed