Past performance is not a predictor of future returns.
It makes more sense to conceptualise it as the total size of a giant savings account run by the government.
We are walking further out on the ice but that is measured more in other ways - with harder metrics like inflation, access to cheap energy, resources, industrial density and capabilities and access to technology - not this headline number.
If you're not - this is the 10th worst ratio in the world. The only countries worse are: Venezuela, Japan, Sudan, Singapore, Eritrea, Bahrain, Greece, Lebanon, and Italy. The difference has historically been that we've been able to exploit the dollar, export our inflation, and so on - but those times are fading.
This bad boy can hold a LOT of debt.
The "masses" are well aware of crypto at this point and BTC is down 47% over this past year. It's just not that useful unless you're trying to skirt laws/regulations[1] or LARPing as a sovereign citizen.
1: Yes, I know, BTC is not even good pick for financial crimes either.
...Actually I have an NFT of some beachfront property.
It appeared to drop from the 2020 highs, yes.
But it's definitely trending upward.
Countries put up with it because the US "provided protection" and insured maritime freedom of navigation. Oh wait ...
And that's excluding the huge amount of multi tiered private credit.
While this is not an indication of anything bad on its own it definitely creates the conditions for cataclysms.
It's like being on a very very dry hay field, it does not mean that you're bound to die on fire, it just means that the risks of a fire being extremely destructive are high.
It's too late for my kids but if i'm ever lucky enough to have grandkids part of their bday and Christmas gifts will be deposits.
You guys are too powerful.
And what about the American public? Look at how much Americans freaked out over a year or two of 6% yearly inflation. How do you think Americans would respond to 30% monthly inflation like in Argentina or Turkey?
Applies only if you are the reserve currency, label everyone else who don't use your currency the way you want it as currency manipulators and you can take whatever debt you want because well the printer can pay everything back in the future.
None of this will get solved until a crisis
> US 30-year Treasury yields just hit 5.2% — the highest level since July 2007. UK gilt yields are at levels not seen since 1998. Japanese bond yields are at record highs. Something is happening in global bond markets, and it's not just about inflation. In this video I explain what's driving the global rise in long-term borrowing costs, why the era of free money is probably over, and what fiscal dominance means for central bank independence. I cover the history of US presidents fighting with the Federal Reserve — including LBJ shoving his Fed Chair against a wall — the 1970s UK economic collapse, the Liz Truss mini-budget crisis, the role of private credit and off-balance-sheet SPVs in financing the AI boom, and what all of this means for the new Federal Reserve Chair Kevin Warsh.
That is, suppose two countries both have $100B in debt. One of them is a small island nation; the other is a global superpower. Obviously the global superpower will be better able to handle that - dividing by GDP helps make that clear.
However, this simple division doesn't tell you some important things. How much of the debt comes due very soon? It's worse if the answer is "most of it." How was it incurred? "Winning a war" is much better than "losing a war."
The United States has lots of debt, and personally I'm worried about the long term serviceability of it. But the ratio to GDP isn't why!
And I say that as an absolute hater of how the pols run the place (yes both sides. One for having no sense of how to manage money and the other having some sense but ignoring it; one of these is objectively worse than the other (yep, I said it, objectively!)).
Seems like the end goal is not to have a country left but instead a bunch of factions more likely to be at war fighting over cash, resources and culture issues. Depressing as fuck for those of us not excited about that end goal.
On the contrary, trivial amounts of money with usury can ruin you financially.
123% comparatively speaking isn't great, but it's not shockingly terrible.
I agree but i wouldn't be that upset if that money was spent on soldier's pay and buying things or R/D from US companies built in the United States while employing US citizens. To me, that's a decent tax/spend jobs program. Now, military money flowing overseas and propping up some other economy? There could be valid reasons but that deserves to go under a microscope.
There's room to debate military spending, but if you view the world as a dangerous place and that the US should not become isolationist, we have to spend the money and have equipment ready and capable whether that's in Europe or in Asia. Alternatively we can disband much of the military, stop paying for this stuff, withdraw from NATO, remove overseas bases in countries like Japan and South Korea, and leave the world to deal with its own problems.
But let's not make some bullshit up about a million dollars wasted on some non-sense, when we have real problems with the DoW, which can't even audit itself, sucking up almost a trillion dollars.
Hi former active duty soldier here - I'm all for generally increasing pay, but you're just making claims here without any basis for them. It cost a lot of money to maintain the industries capable of producing weapons. We can stop the spending, but then they go out of business and now that capability is lost. Look at Europe. Depends on the details. What specific waste are you talking about? Here's [1] an article that came out recently highlighting how much of our explosives and munitions manufacturing is reliant on just a few locations - cut the DoD budget, and then these are the kinds of things that happen.
Secondly, you have no expertise or authority to make claims as to whether we're spending the right amount of money - whether that's too little or too much, without additional specific logic or factual claims. When you say the DoD is sucking up a trillion dollars you're implying that it's all waste - sorry don't think that's true. And when you look at the performance of equipment that other countries provide versus the US, you know our stuff actually works as advertised. Maybe the US is actually spending too little, and other countries are spending proportionally much less on vaporware?
[1] https://www.wsj.com/world/europe/western-powers-race-to-brin...
> you have no expertise or authority to make claims as to whether we're spending the right amount of money
To
> Maybe the US is actually spending too little, and other countries are spending proportionally much less on vaporware?
But more on topic, the real question is if this is spending that is worth going into debt for. No family anywhere in the world can sustain a long period of overspending relative to income.
You talk about weapons and stuff but just understand that you're handing over your bargaining power because the rest of the world controls your debt. And at these ratios thats significant leverage.
By now you can win a war without a single shot being fired.
No, snide and wrong is extremely different!
Social Security spending is already funded by a separate tax and currently running a surplus. It's what our legislators are are debt to when use the discretionary budget to let the President start a game of Battleship in the straight of Hormuz.
Snide and wrong! You must be talking about the OP then and not me.
> Social Security spending is already funded by a separate tax and currently running a surplus.
If someone doesn't want to pay in to it, what difference does whether it's fully-funded or not make?
> It's what our legislators are are debt to when use the discretionary budget to let the President start a game of Battleship in the straight of Hormuz.
Or when they enact a pet project you agree with and others disagree with.
Most of that money ends up being spent in communities (grocery stores etc) and hospitals. So at least that money flows back into a local community.
There's plenty wrong with the US healthcare system, but since the vast majority gets their healthcare through their employer you'll have to come up with something for when they retire or unable to work. That's just an outcome of how the system was set up.
$859 billion to DoD
$339 billion Veterans benefits
Then when we look at the $952 billion in interest, a good chunk of that is due to past military spending.
Plus even more - tens of billions of the military nuclear budget is done via the DoE, not the DoD in the budget line.
There's always a hand waving that previous debts accumulated like veteran's benefits and military related debt interest are not military spending, but they obviously are.
A few others I can think of:
Government insurance/funding for homes destroyed by natural disasters - why am I bailing out Florida homeowners when their home is destroyed by a hurricane? At best you get the first one free and then you're on your own after that.
Billions for highway construction that is not needed, which then costs more to maintain and results in more spending on cars, more deaths, higher costs for insurance, &c.
Various improper payments, billions in subsidies handed out, COVID-19 bailouts and forgiveness
Making fun of science that politicians, wanna be politicians, and conservative media don’t remotely understand in order to deflect and hide actual economic problems they cause is a favorite pastime, but is almost always misleading.
The goat yoga thing isn’t true, it’s pure viral talking point made up nonsense. Don’t believe everything you read on the internet, especially if Elon Musk retweets it.
Because the private sector doesn't spend any money on things that don't work out.
Sometimes you win, sometimes you lose.
You talk about millions, that's not even a rounding error. Look around you in any private entity, you don't see them spending any tiny fraction on things you don't think are worthwhile?
> $1.7 billion maintaining empty buildings
Assuming they at some point become occupied again, I don't see the issue. The vacancy rate in the private sector isn't anywhere near 0% either.
> In 2021 alone, the government managed to misplace $281 billion in payments
You'll need to be way more specific than 'misplaced'
Some grad student studies the effects of alcohol on fish, learns something new about biology, publishes it so that other students and researchers learn about it, and a few years later after some new studies based on that initial research we get a new cancer drug.
Somebody spends $1 million studying the effects of music on dairy cows, learns that they produce more milk if calming music is played and farmers increase revenues by $10 million per year by adding speakers to their milking rooms.
The billions of dollars spent blowing up infrastructure in the middle east is just a loss, but money spent on research is how we've cured diseases, increased crop yields, launched satellites, and made it so that everyone can have a supercomputer in their pocket that can stream HD video through the air.
That said, 1.5 million on goats, 1 on cows, 1.7 million on fish, these are all perfectly reasonable research costs compared to the potential benefit to agriculture on the scale of the USA, well within the "throw it at the wall and see what sticks" kind of territory; likewise 5 on an anti-smoking campaign and th health burden of smoking in a nation as big as the USA.
In practice though tax cuts usually make rich richer without helping the economy to grow (because of lobbying/corruption).
It's the old saying, if you owe the bank $1,000 then you have a problem. But if you owe the bank a trillion dollars then the bank has a problem.
Especially when that trillion dollars was spent on an insane fleet of aircraft carriers.
The reality is that purposefully inflating your currency to reduce your debt burden is going to upset your creditors just as much as if you just defaulted on your debts, but will have the added affect of crippling your economy with inflation. Look at how much Americans freaked out over a year or two of 6% yearly inflation. How do you think Americans would respond to 30% *monthly* inflation like in Argentina or Turkey?
It's not like lenders won't notice if the USA tried to print its way out of debt.
2. Do you think Americans would tolerate having a government that purposefully suppresses their purchasing power through structurally low wages, and buying up foreign assets to supress the value of their own currency?
3. The part where China spends all their cash to buy US Treasuries to supress the value of their currency wouldn't really work as well for the USA when international trade is dollar denominated anyways, and the bulk of their GDP comes from domestic consumption.
4. The USA has a deficit. It'd need to borrow even more in order to finance the suppression of their currency, whereas China just redirects the money they earn from export surpluses.
1. Extremely painful to Americans, and became one of the main pillars of their election.
2. Nowhere near high enough to cause any reduction in the USA's debt burden.
Americans are way too soft to even imagine the sort of inflation that'd be required to erase their debts.
There's a LOT of reasons for them to not want to do that, and the status quo benefits a lot of other powerful players as well, but screwing up treasuries would be a quick way to change that math.
One can get away with being an asshole only so long.
And that's not a problem that's solvable with military might! "Investors around the world are declining to buy US government bonds" can't be bombed the way an oil refinery can be.
juujian•1h ago
joinjune•57m ago
notfromhere•56m ago
Which is an intentional strategy to repeal social programs that they’d never get the votes to do so via legislation
ModernMech•51m ago
thenewnewguy•39m ago
Republicans are the only party that in the 21st century acts as though we can simultaneously cut taxes and increase spending and everything will be fine.
ghastmaster•7m ago
What does change(and is more important) is Debt/Revenue:
https://fred.stlouisfed.org/graph/?g=TZfm
The ratio is looking like it is trending in the right direction. If GDP decreases while nominal tax receipts increase, GDP does not change the debt, while the debt/Revenue ratio looks good for paying bills, while not boding well for economic health.
What is this "real world" you are referring to? There has to be a balance between current and future expenditures and economic health to facilitate these. Nothing exists in a vacuum.
bilsbie•41m ago
Here is some absurd garbage your US taxes paid for:
•$1.5 Million studying the effects of yoga on goats
•$1.7 billion maintaining empty buildings
•$5 million on a campaign to promote an alternative music scene to get hipsters to stop smoking
•$2 million to create an internship program that resulted in the hiring of one full-time employee at the Department of agriculture
•In 2021 alone, the government managed to misplace $281 billion in payments
•$1 million studying the effects of music on dairy cows
•$1.7 million to study the effects of alcohol on fish
throwaway894345•54m ago
jhickok•53m ago
It could be a very messy bubble if/when it collapses, and I think our way out at this point would have to be AI-driven productivity gains. Hopefully Altman's little wish-granting machine ends up being accurate.
toomuchtodo•36m ago
> Basically, America has an economy that is buoyed by AI development and infrastructure spending right now but is poised to pop and the national debt has been ballooned by two to three generations of political leadership failing to properly address underlying issues and instead printing money.
Maybe we shouldn't have spent five decades giving the wealthy tax break after tax break while hollowing out the middle class and suppressing wages with union busting and globalization. Productivity is up ~90% over this time frame, and most of the gains have gone to the top 1%. But here we are. The bill has come due for strip mining the country economically, and taxes will go up to pay down this debt (because only the top ~40% of income earners have enough income to have a federal tax liability).
chasd00•25m ago
it won't be the wealthy or cash-under-the-table classes paying these taxes, the increases will be in the income brackets. Which means paycheck receiving working stiffs ( middle and upper-middle class ) and retierees drawing from a 401k/IRA are the ones who will pay just like always.
quickthrowman•13m ago
Hell, between PPP and the OBBB tax cuts, rich people are getting $2T over from the YS Governemnt from 2020-2030. It’ll keep happening too, this country is an oligarchy now. Wish it wouldn’t but I don’t see a sea change coming, just further concentration of wealth and power.
throwawaypath•18m ago
Yes, "science" funding! To fund "science" such as:
Culture Change for Inclusion of Indigenous Voices in Biology
Strengthening Inclusion by Change in Building Equity, Diversity and Understanding (SICBEDU) in Integrative Biology
An Equitable, Justice-Focused Ecosystem for Pacific Northwest Secondary CS [Computer Science] Teaching
https://nsf-gov-resources.nsf.gov/files/NSF-Terminated-Award...
beej71•11m ago