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More importantly. The ability to project force and be the dominant military superpower goes a long way to maintaining the dollar as the worlds reserve currency. So it kind of pays for itself…..
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When will the economy collapse?
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i think that can be done without having to pay 10x what others pay.
also i think the day we lose world reserve currency, we will still be spending more than others on military/defense.
When that happens, we will be forced to cut the military and pretty much everything else.
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Ukraine: Did he just call us a third world country?
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deleted87051
Other ways to lose reserve currency status.
How bad is the debt ceiling stand-off in Congress? Like potential collapse of the dollar as global 'unit of account' bad, economist says. | Fortune
More than half of world trade – oil, gold, cars, smartphones – is now in U.S. dollars, with the euro accounting for around 30% and the rest making up the balance.
Disagree. The reason why we are the reserve currency is because we have rule of law here. That is separate from having the world military superpower. In fact, our most recent endeavors of “projecting force” in Afghanistan, Iraq have been abject failures and bred more ill-will and destabilized the region.
If we kept the debt ceiling in place in 08 instead of "bailing out" (I mean transferring debt onto the worthless shlocks) we'd be better off today with an 8 trillion dollar debt instead of 4X that amount.Other ways to lose reserve currency status.
How bad is the debt ceiling stand-off in Congress? Like potential collapse of the dollar as global 'unit of account' bad, economist says. | Fortune
More than half of world trade – oil, gold, cars, smartphones – is now in U.S. dollars, with the euro accounting for around 30% and the rest making up the balance.fortune.com
But we'll raise the debt ceiling again. That'll fix it.
pretty much. its ranked pretty low on development in europe
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deleted87051
Massive cuts: SS, Medicare, military, everything across the board. Tax cuts repealed. Tax increases at all income levels. Shut the border. Balanced Budget amendment.
That's my platform. Will I get more than a dozen votes? Nope, but that is possibly the only solution barring some amazing energy developments etc; so to therefore answer your question.... Probably nothing, because all of the small bandaids and political blowhard talk is meaningless as far as getting this runaway train off the track.
thats why its uncertain if blindly putting money in index is a good idea if you are just starting out. i have a feeling next 50 years sp500 wont be generating 10% yearly returns
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deleted87051
Even with all that, we still need to raise the debt ceiling this year or else we default on our already incurred debt obligations. Raising the debt ceiling is about paying our past creditors, not about current and future spending. It’s paying the mortgage we took out 6mos-30 years ago, not taking out a new loan now to make home improvements.
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Think I’d rather live in the money printing America than yours…
I agree. There is no way it can be fixed. No one is going to vote to increase their taxes and decrease their benefits. The only thing we have going for us is the reserve currency thing. We keep that by being the most powerful and stable country that there is.
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deleted87051
When we default on our treasury bonds, we won’t be a powerful or stable country. We’ll be Greece.
The question is: If we continue to live in the money printing America do we end up living in a America that is worse than the version with all of the cuts (ie the worst timeline)?
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For those advocating for increasing taxes on the wealthy, I recommend researching Thomas Sowell and Walter Williams. They are true free market economists who have good videos on YT that explain why increasing tax rates does not increase tax revenue. The reverse is actually true as what happened under the Reagan and Kennedy administration.
So the guy who actively opposes diversity, equity, and inclusion programs is a uniter
[emoji848]
DeSantis pushes ban on diversity programs in state colleges
Florida Gov. Ron DeSantis has announced plans to block state colleges from having programs on diversity, equity and inclusion, and critical race theory.apnews.com
DEI or woke culture is an incredibly divisive ideology.
They ended up spending a lot and he did end up raising taxes more toward the end of his time. My overall point is that economics is not a zero sum game and simple calculations such as, get more money = tax rich people more is absolutely not the answer.
Reagan’s tax-cutting legacy
President Reagan had a gift for proving his critics wrong. Almost none of the leading economists of the late 1970s thought that his supply-side, tax-cutting agenda, along with stable monetary policy and deregulation, could revive the U.S. economy. But the prosperity of the 1980s, with growth...
www.heritage.org
Raising taxes on wealthy people (and on everyone else, really) is absolutely part of the answer.They ended up spending a lot and he did end up raising taxes more toward the end of his time. My overall point is that economics is not a zero sum game and simple calculations such as, get more money = tax rich people more is absolutely not the answer.
Reagan’s tax-cutting legacy
President Reagan had a gift for proving his critics wrong. Almost none of the leading economists of the late 1970s thought that his supply-side, tax-cutting agenda, along with stable monetary policy and deregulation, could revive the U.S. economy. But the prosperity of the 1980s, with growth...
It’s not, simply because the government is terrible at solving problems. It’s not any specific person or parties fault, it’s just the way we are, a collection of people with wide geographical, cultural and religious differences. Centralized federal power cannot govern us efficiently, their role should be as a mediator and enforcer of laws. Real solutions happen at a granular level.
I think this issue is the same as what we see on a personal level. If someone runs up credit card debt and is unable to save money on their current salary, then doubling their salary doesn't make the situation any better. We need to control spending in relation to our national budget. Increasing taxes will lead to the same level of overspending and the budget will continue to spiral out of control. That is where to start.
The idea that a ballooning deficit and a 31 trillion dollar debt can be solved without spending cuts and tax raises is just flat-out wrong according to the math. It just is.
Even before the pandemic the trump tax cuts were on track to add 2 trillion to the debt.
Couldn't agree more. It is still important that we control the spending before we just blindly hand the government more money. Call me paranoid, but I want to see those spending changes before I believe it. I would call anyone that believes the opposite very naive.
About as naive as believing in trickledown economics
And about as naive as thinking the sky is blue bc we live in the eye of a blue-eyed giant. Does your comment have a point? Did I mention trickledown economics???
Did I say you did?
Is going in to default to prove that point a net positive in your view? If we were flying a plane about to run out of gas would you demand to shorten the trip before agreeing to refuel it or let it crash and burn to the ground to make your point?
Our current obligations are what they are--if the party of fiscal responsibility wants to change that (only when they dont control the presidency of course for some reason....) then why not do that without the suicide bomber tactic? Did the dems threaten to tank the economy when the Republicans had control?
Trickle down economics is not a real concept, it's a politicized moniker.
I understand what you're arguments are with revenue/spending and I think it would be reasonable if we had a central government that was capable of solving the problem.
However, the federal government is the mediator for a crony capitalist system and not currently capable of fixing this no matter what political party is in charge.
Just look at our field, at the ADVANCE meeting last weekend they talked about how insidious and thought out certain payers (United) were leading up to this year. Now they're using these methods with a compliant central government to basically steal income from us (and others).
Until Citizens United is repealed and we have strict Congressional/Senate term limits and true campaign finance reform written into the Constitution you may be right.
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Well with the way things are going we'll either end up with a second confederacy or more likely a theocratic dictatorship in your lifetime, then that awful federal government won't look so bad.
Theocratic dictatorship? What theocracy, Christianity?
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deleted87051
If we don’t raise the debt ceiling and end up defaulting, maybe our largest debt holders will bail us out and impose sanctions and austerity measures on us.
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deleted87051
I don't know--which religion have you noticed playing an important role these days in this country? Seen any SOCTUS decisions on religion lately and noticed any patterns? Did you forget how trump pepper sprayed away protestors so he could go stand in front of a church with a Bible?
If the religious right supported him in such an undying fashion imagine if someone who wasn't such a trashy heathen actually got widespread support of the right and spouted all the correct religious views....
See, here's a perfect example where you don't have to be pals and can still remain objective. Have zero in common, woke vs anti-woke, probably would be horrendous working with each other.... And yet here you are bring absolutely 100% correct. Man do I get tired of the Reagan myth about being so d*mn great. He ratcheted up the debt train that is now completely out of control and will wreck tremendous havoc before it's done mowing down our financial condition.
US national debt is $31T and "foreign debt holders" like Japan and China who each hold less than 1/30th of that, and are drowning in debt of their own ... they're going to bail us out? It's bold strategy, Cotton ...
People have argued does raising taxes increase revenues for as long as we've been in debt. But one way or another, EVERYONE will be taxed more. It's a guarantee.They ended up spending a lot and he did end up raising taxes more toward the end of his time. My overall point is that economics is not a zero sum game and simple calculations such as, get more money = tax rich people more is absolutely not the answer.
Reagan’s tax-cutting legacy
President Reagan had a gift for proving his critics wrong. Almost none of the leading economists of the late 1970s thought that his supply-side, tax-cutting agenda, along with stable monetary policy and deregulation, could revive the U.S. economy. But the prosperity of the 1980s, with growth...
We can do it the old fashioned way by directly taking a couple of hundred thousand more out of your million, or we can indirectly take a couple of hundred thousand more out of your million by inflating the currency to service the debt which thereby makes the purchasing power of your million a couple of hundred thousand less.
Plan B is what will and always happens because Plan A will be and always is rejected by the masses. In the end... we aren't escaping the debt either way (though Plan B does dump a lot of the debt onto the sucker foreign countries that bought our debt 😉)
Not really. Moreover, foreign assets more or less balance foreign debt. Most of that $31T is owed to Americans, or is intragovernment debt. I'm not saying it doesn't matter - because it does - but it's not a huge lever held by hostile foreigners that some people would have you believe.
In any case, it's not like anyone - foreign or not - can just "cash out" any of this debt, demand immediate payment for a bond's face value in gold doubloons. It's structured debt. A contract. No one can cash out a bond early; likewise, the US government can't "pay it back" early if the bond holder would rather collect the interest over the life of the bond. They can try to sell the bonds for market rates, but obviously (at least I hope it's obvious) if someone tried to dump $1T in bonds next Thursday, they'd have to find a buyer and they sure as hell wouldn't get $1T for them.
Foreign debt is not the problem.
Even if they were willing to take a loss on their bonds and dumped them on the market just for the sake of disruptively sowing chaos ... that's a suicide pact that probably hurts them more than us. Who buys the dump?
It's a fascinating circular thought experiment to contemplate these ideas, but the narrative that we're somehow beholden to and at the mercy of China or anyone else because of our national debt, just reflects a fundamental misunderstanding of what the debt is.
While we're speculating about what-ifs, I'll just throw out another thought experiment I like to post whenever this topic comes up:
Imagine you're an alien, watching tribes of primitive monkeyhumans on their backwards little planet orbiting a small yellow sun in the unfashionable end of the galaxy. One tribe, let's call them the nord'mericans, has spent a long time trading little green slips of paper and promises for more little green slips of paper to other tribes, in return for valuable, scarce, and/or nonrenewable resources. Like oil, or plastic lawn chairs. One day, the nord'mericans just say **** it, we're outta green paper and outta promises and we're gonna sit here looking across a couple of ocean moats, our continent is rich in natural resources, we can feed ourselves, we can make stuff (when we're bothered to get out of bed to do it) ... whaddaya gonna do?
Who do the aliens think won that exchange?
It's the biggest and most transparent con in the history of the planet. That we're the ones running the con is a little greasy, shameful, and disheartening ... but it's arguably better than being the ones getting conned.
Exactly right.
Plan A: Hope and pray we can "grow" enough to keep the debt serviced. Some massive technological advancement is needed. Free energy, AI butlers, I don't know.
Plan B: Inflate enough to keep the debt serviced. It's the ultimate regressive tax, disproportionately harming the poor, which is ironic since Democrats seem OK with this plan.
Plan C: Cut spending (Republican talking point when NOT in power), raise taxes (Republican kryptonite). Yeah, right.
I think you're conflating some risks here.
Because surely you're not suggesting that zealot-led nuclear-equipped countries (Russia?) wouldn't start wars if only, if only, other countries are fair in their macroeconomic policies?
I mean yeah, some (most?) wars are about seizing resources, and it's easier to rile the peasants up for a fight if you can convinced them they've been wronged by those rich dinguses next door who have stuff they don't deserve (your stuff! stuff you should have!). And of course again yeah, instability and poverty breeds both the political leaders who like to embark on wars of conquest, and people willing to climb aboard ... but these are rational actors. And rational actors don't destroy the world they want to rule, and rational actors don't risk getting melted by a retaliatory strike.
The nuclear risk is proliferation and terrorism, not Armageddon.
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Maybe. I imagine Pakistan and India nuking each other or some war mongering irrational actor who rises to power because people are desperate who actually attacks a super power and prompts a retaliatory strike.
We don't actually know how it would play out because it has never happened which is exactly why assuming the best case scenario of local limited skirmishes only seems overly optimistic . If the USA says **** all you we aren't going to pay our bond debt anymore and this causes economic collapse in China or India it wouldn't be out of the question that nuclear war happens as a direct result.
Pakistan is the proliferation threat I worry about the most, to be honest. Their government is a mess, riddled with religious extremists. Proliferation is a risk. Losing a couple of bombs to some crazy people is a risk.
I'm more worried about a Pakistani bomb blowing up New York than Mumbai or Delhi.
Of course it'd be out of the question! C'mon.
Or do you really think that Winnie-The-Pooh lookalike and first-class dingus running China would empty the silos and get his own country turned into a glass parking lot because they lost a WHOLE TRILLION DOLLARS while the US was shooting itself in the foot with a completely unnecessary default? He'd lean back with a pot of hunny and some popcorn and seize the opportunity to enhance China's standing and influence in the world.
I meant in your scenario where we essentially default on all debt indefinitely and destabilize the world order. You are applying assumptions from the way the current world works to the doomsday scenario where the worldwide economy implodes. Trade will stop, starvation happens etc. People get desperate and crazy thing can and will happen.
That scenario seems about as likely as the USA unilaterally deciding to launch all the nukes first. 🙂
I think that's just as unlikely as any other dictatorship taking over overtly in the US. I'm Catholic and I think we're as close to a schism in the Church as we've been since the Reformation. Adding to that the difference between Protestants and Protestant/Catholics the idea of a Christian dictatorship is laughable to me.
Regardless, you're clearly speaking about the Dobbs decision. That's obviously extremely contentious and many people are upset about it. However, it's really an example of how limiting federal government is beneficial, because RvW essentially made abortion a constitutional right and it solved nothing. The issue was still contentious and "pro-lifers" were not satisfied with being told how their community should live. When SCOTUS reversed it, now the onerous is on state legislators and even smaller forms of government to ask the difficult questions and try and figure out the "best answer" for their populace.
Maybe you thought that many states would be quick to "take advantage" of women by passing what many would view as too strict abortion laws, but that really hasn't been the case. Georgia had their ban struck down and are trying to figure out what kind of bill that they even want to pass. Minnesota passed pro abortion laws. Montana went a step forward and struck down a memorandum saying that providers are not obligated to provide reasonable, life sustaining care to an infant born alive, even for attempted abortions. That last one is a particularly vicious support for the essence of pro abortion advocacy.
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