Red Mosquito

Orpheus wrote:I meant it's more bizarre in the sense of the "existential fear" sense. There's about 100 things to fear before we get to the debt, like getting shot in the face or dying in a disaster caused by state neglect.

Yes, exactly. I think very few people are saying that debt is not real, and many more are expressing the sense that if national debt becomes an "existential" problem for the US, we will have *way* bigger problems on our hands already. Even 4/5 phrased a version of this--yes, if the US is no longer the global hegemon, then our debt could be used against us (Bi_3 is exactly right to reference the deletrious effects of debt levering in the 1980s and 1990s on developing nations, marshaled through the World Bank and the IMF). But that's predicated on the US no longer being the global hegemon, a process that in itself will have pretty deletrious effects on US standard of living and will most likely entail the domestic imposition of exactly the kinds of austerity politics some of you fear will be imposed from without.

To phrase it a different way, debt is mostly epiphenomenal here. Take Trag's predictions: if we no longer had national debt, would that stop the assault on the US welfare state or halt the march of extractive industry despite obvious environmental costs? No, it would not. So as 4/5 spells out, debt might pose some limits on policy (assuming we continue to honor our national debt). But it's not in-itself causing those problems.

Orpheus wrote:I meant it's more bizarre in the sense of the "existential fear" sense. There's about 100 things to fear before we get to the debt, like getting shot in the face or dying in a disaster caused by state neglect.

Right, that makes sense. I imagine I'd rank debt much higher on my list than you. Personally, I think I'm many times more likely to be negatively impacted by the consequences of too much government debt than shot in the face, but I take your point.

I don't worry about "getting shot in the face" anywhere near as much as how things impact my near and long term financial situation. I must live a charmed life.

Mickey wrote:

Orpheus wrote:I meant it's more bizarre in the sense of the "existential fear" sense. There's about 100 things to fear before we get to the debt, like getting shot in the face or dying in a disaster caused by state neglect.

Yes, exactly. I think very few people are saying that debt is not real, and many more are expressing the sense that if national debt becomes an "existential" problem for the US, we will have *way* bigger problems on our hands already. Even 4/5 phrased a version of this--yes, if the US is no longer the global hegemon, then our debt could be used against us (Bi_3 is exactly right to reference the deletrious effects of debt levering in the 1980s and 1990s on developing nations, marshaled through the World Bank and the IMF). But that's predicated on the US no longer being the global hegemon, a process that in itself will have pretty deletrious effects on US standard of living and will most likely entail the domestic imposition of exactly the kinds of austerity politics some of you fear will be imposed from without.

I mostly agree with this with the caveat that I think if people become unwilling to lend to the federal government, be they Chinese, Japanese, American, or Martian that things will go very badly. My concern about the debt isn't overtly tethered to dread of crossing China or the international boogeyman one's choice.

Mickey wrote:To phrase it a different way, debt is mostly epiphenomenal here. Take Trag's predictions: if we no longer had national debt, would that stop the assault on the US welfare state or halt the march of extractive industry despite obvious environmental costs? No, it would not. So as 4/5 spells out, debt might pose some limits on policy (assuming we continue to honor our national debt). But it's not in-itself causing those problems.

This assumption is a fun part. I think the case can be made that the fact that foreigners hold as much of the debt as they do makes it easier for the federal government to monetize the debt than it would be in the absence of international capital inflows. Monetizing the debt has always struck me as more likely than outright default, but you never know.

verb_to_trust wrote:I don't worry about "getting shot in the face" anywhere near as much as how things impact my near and long term financial situation. I must live a charmed life.

It's true, you do. So do I, and probably everybody on this board to one degree or another.

4/5 wrote:

verb_to_trust wrote:I don't worry about "getting shot in the face" anywhere near as much as how things impact my near and long term financial situation. I must live a charmed life.

It's true, you do. So do I, and probably everybody on this board to one degree or another.

Except for the fact that basically everyone here has depression

I wish it didn't take Congress bribing the states, but I do like this part of the infrastructure plan

Eliminate exclusionary zoning and harmful land use policies. For decades, exclusionary zoning laws – like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing – have inflated housing and construction costs and locked families out of areas with more opportunities. President Biden is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.

4/5 wrote:

Mickey wrote:

Orpheus wrote:I meant it's more bizarre in the sense of the "existential fear" sense. There's about 100 things to fear before we get to the debt, like getting shot in the face or dying in a disaster caused by state neglect.

Yes, exactly. I think very few people are saying that debt is not real, and many more are expressing the sense that if national debt becomes an "existential" problem for the US, we will have *way* bigger problems on our hands already. Even 4/5 phrased a version of this--yes, if the US is no longer the global hegemon, then our debt could be used against us (Bi_3 is exactly right to reference the deletrious effects of debt levering in the 1980s and 1990s on developing nations, marshaled through the World Bank and the IMF). But that's predicated on the US no longer being the global hegemon, a process that in itself will have pretty deletrious effects on US standard of living and will most likely entail the domestic imposition of exactly the kinds of austerity politics some of you fear will be imposed from without.

I mostly agree with this with the caveat that I think if people become unwilling to lend to the federal government, be they Chinese, Japanese, American, or Martian that things will go very badly. My concern about the debt isn't overtly tethered to dread of crossing China or the international boogeyman one's choice.

Yeah so I think you and I are basically in agreement here. I would just reiterate that while a sort of universal unwillingness to lend the US government money will be um...bad for people who live in the US, this development has (in my eyes) less to do with the debt itself and more to do with a growing perception that the US will never make good on this debt *because* we have essentially exhausted our productive capacities and now have an economy oriented entirely around financialization and speculation. You could also argue, given how much of the national debt came from 2008 recovery efforts, that financialization is *doubly* the reason we're in this bind--this is what I mean by epiphenomenal, the debt is a symptom of an economic sickness, and it is ultimately that sickness and not the debt itself which will cause creditors to lose faith in the US state. But again, I also think that we're already seeing (and have been seeing) the imposition of the kinds of debt-leveraged austerity politics that are being invoked here as a boogeyman, and we would continue to see these even if we had no national debt because there's still a broader problem with capital accumulation.

This next paragraph is a bit more speculative, but I think this is what tempts people (like ellis) to say, "Well, fuck the debt if it's being spent on things like infrastructure rather than further handouts to the financial sector," and in some ways I agree, insofar that I think that ultimately you escape from the debt problem through a combination of reorienting the economy around productive activities and increasing tax revenues. Infrastructure spending seems to me one way to do that, but I'll admit that I'm way more versed in the historic properties of debt vis a vis the capitalist world system then I am in any policy decisions to address it.

4/5 wrote:

Orpheus wrote:I meant it's more bizarre in the sense of the "existential fear" sense. There's about 100 things to fear before we get to the debt, like getting shot in the face or dying in a disaster caused by state neglect.

Right, that makes sense. I imagine I'd rank debt much higher on my list than you. Personally, I think I'm many times more likely to be negatively impacted by the consequences of too much government debt than shot in the face, but I take your point.

I mean I live in Texas and wake up to news of a shooting every day, so it's a little bit more on my mind than something like the debt.

Mickey wrote:I would just reiterate that while a sort of universal unwillingness to lend the US government money will be um...bad for people who live in the US, this development has (in my eyes) less to do with the debt itself and more to do with a growing perception that the US will never make good on this debt *because* we have essentially exhausted our productive capacities and now have an economy oriented entirely around financialization and speculation.

Yeah, without a doubt there has to be something that causes people to change their mind and stop investing in this thing that has been viewed as the world's safest financial asset (U.S. treasury debt) for a long time. Fully agreed on that point. I don't really want to start predicting exactly what that trigger will be because I know I can't begin to imagine certain things about the future, but your "because" seems one possible cause, though I don't think "we have essentially exhausted our productive capacities" is something likely to occur in the time horizon I envision debt (potentially) becoming a crisis. (Side note: nothing about this has to be inevitable. There are many paths open to avoiding a crisis, so I don't want to come off as alarmist. I am worried that the politically expedient choices (from both parties) tend towards exaserbating the problem, though.

I know I said I don't want to predict a specific cause, but I think the pivotal trigger doesn't have to be as dramatic as you suggest. The treasury's rating was downgraded a few years ago during the debt ceiling fiasco and I read recently that Fitch is considering downgrading treasury debt again. It didn't matter then and it won't matter now either, our whole economy is so debt-centered (as I write that I look back at what you said and agree with you more, though I think you may have overstated the cause by requiring productive capacities to be dried up, because the second half of your reason is happening, except I would omit "entirely") that downgradings don't spook anybody. Long story, slightly less long: if we have a large enough debt (relative to GDP) the entire market doesn't need to be spooked at first. But if a not insignificant share of investors, domestic or foreign, pull back on their treasury purchases, higher interest rates can set off a brutal cycle leading to interest payments taking up a dominant share of tax revenue, tax increases, (at this point probably of the much too high and too late combination) along with inflationary policies to ease the burden of the debt, reduced economic activity, investors become more scared, interest rates rise, etc.

Mickey wrote:You could also argue, given how much of the national debt came from 2008 recovery efforts, that financialization is *doubly* the reason we're in this bind--this is what I mean by epiphenomenal, the debt is a symptom of an economic sickness, and it is ultimately that sickness and not the debt itself which will cause creditors to lose faith in the US state.

This could very well be. I would probably define that sickness more broadly than you since I think the financial crisis was largely the result not of government or private bank policies but rather the unholy marriage of government and the banking sector, but that's a topic for another discussion.

Mickey wrote:But again, I also think that we're already seeing (and have been seeing) the imposition of the kinds of debt-leveraged austerity politics that are being invoked here as a boogeyman, and we would continue to see these even if we had no national debt because there's still a broader problem with capital accumulation.

This is certainly true. The fact that it's true frustrates me because it's clear that a large portion of the people who claim to be worried about debt today were for some reason (wonder why!) not worried about record deficits during an economic boom a couple of years ago. This obvious truth predictably leads intelligent people who are concerned about the poor, etc., to begin to disregard warnings about debt as conservative anti-poor boilerplate, and that's a shame. I can't blame people who feel that way, it's a very reasonable position to take. But it leaves someone like me who thinks this can get very ugly but isn't trying to use that belief to cut off aid to the needy in a lonely position.

Mickey wrote:This next paragraph is a bit more speculative, but I think this is what tempts people (like ellis) to say, "Well, fuck the debt if it's being spent on things like infrastructure rather than further handouts to the financial sector," and in some ways I agree, insofar that I think that ultimately you escape from the debt problem through a combination of reorienting the economy around productive activities and increasing tax revenues. Infrastructure spending seems to me one way to do that, but I'll admit that I'm way more versed in the historic properties of debt vis a vis the capitalist world system then I am in any policy decisions to address it.

As I said in another post, infrastructure seems to be one of the ways governments can spending that boosts productivity and growth in a pretty tangible way. Tax revenue certainly needs to be increased but I'm very skeptical of the Warren/Bernie ideas for how to raise that revenue. I think they tend to be much more likely to drive money out of the U.S. and to risk reducing revenue and economic activity which would be counterproductive if I'm right. I'd probably put the priority on reducing deficit spending, getting it back to around a more sustainable 2-3% deficit-to-GDP ratio, and suggest that we maintain that ratio which would require increased revenue if policymakers want to spend beyond those levels.

Mickey wrote:

4/5 wrote:

Mickey wrote:

Orpheus wrote:I meant it's more bizarre in the sense of the "existential fear" sense. There's about 100 things to fear before we get to the debt, like getting shot in the face or dying in a disaster caused by state neglect.

Yes, exactly. I think very few people are saying that debt is not real, and many more are expressing the sense that if national debt becomes an "existential" problem for the US, we will have *way* bigger problems on our hands already. Even 4/5 phrased a version of this--yes, if the US is no longer the global hegemon, then our debt could be used against us (Bi_3 is exactly right to reference the deletrious effects of debt levering in the 1980s and 1990s on developing nations, marshaled through the World Bank and the IMF). But that's predicated on the US no longer being the global hegemon, a process that in itself will have pretty deletrious effects on US standard of living and will most likely entail the domestic imposition of exactly the kinds of austerity politics some of you fear will be imposed from without.

I mostly agree with this with the caveat that I think if people become unwilling to lend to the federal government, be they Chinese, Japanese, American, or Martian that things will go very badly. My concern about the debt isn't overtly tethered to dread of crossing China or the international boogeyman one's choice.

Yeah so I think you and I are basically in agreement here. I would just reiterate that while a sort of universal unwillingness to lend the US government money will be um...bad for people who live in the US, this development has (in my eyes) less to do with the debt itself and more to do with a growing perception that the US will never make good on this debt *because* we have essentially exhausted our productive capacities and now have an economy oriented entirely around financialization and speculation. You could also argue, given how much of the national debt came from 2008 recovery efforts, that financialization is *doubly* the reason we're in this bind--this is what I mean by epiphenomenal, the debt is a symptom of an economic sickness, and it is ultimately that sickness and not the debt itself which will cause creditors to lose faith in the US state. But again, I also think that we're already seeing (and have been seeing) the imposition of the kinds of debt-leveraged austerity politics that are being invoked here as a boogeyman, and we would continue to see these even if we had no national debt because there's still a broader problem with capital accumulation.

This next paragraph is a bit more speculative, but I think this is what tempts people (like ellis) to say, "Well, fuck the debt if it's being spent on things like infrastructure rather than further handouts to the financial sector," and in some ways I agree, insofar that I think that ultimately you escape from the debt problem through a combination of reorienting the economy around productive activities and increasing tax revenues. Infrastructure spending seems to me one way to do that, but I'll admit that I'm way more versed in the historic properties of debt vis a vis the capitalist world system then I am in any policy decisions to address it.

I actually agree with most of what you wrote there. The movement to a financialized economy, where a business is just an ad for it's stock, needs to be undone for things to get better. I don't see how more debt doesn't make this worse as competition for investment becomes more fierce.


In my case, the existential fear is that as the cost of a debt financed government increases, we will not be able to control inflation effects leading to a domino type effect on SLG level services and make social stability crumble. And we all get shot in the face until we get to Robocop. It's possible that as a nation we come out better on the other side, in like 100 years, but the rest of my life and kid's lives is in the grey area.

What in the late-stage Byzantine Empire...

https://www.reuters.com/article/us-usa- ... ce=twitter

BurtReynolds wrote:What in the late-stage Byzantine Empire...

https://www.reuters.com/article/us-usa- ... ce=twitter

Sweet, indirect stimmies for the gangs and cartels.

$1200 or $2000?

If the coverage I've seen is inaccurate, then I'm mistaken. I thought a good number of the older migrants were coming because any storefront business has to deal with very expensive shakedowns from local gangs. People that used to make a living now are worried about gang violence. Don't know how an infusion of money does anything if the government and legal system aren't significantly reformed and strengthened. Not great having Presidents getting bankrolled by Narcos.

AOC critique in 3...2...1...

i remember in '08 how many of the white privileged left were content that the end of the U.S. financial empire had finally arrived

but then it rebounded within a couple years

we have a better central bank

(now) better regulators

we have accounting standards

don't have the risk of nationalization of industries

even in the depths of the morass of the now-routine congressional debt ceiling standoff, it was known the U.S. Treasury planned to make debt service payments and force a constitutional crisis, rather than default on U.S. debt due to congressional inaction

and if all that doesn't work, we still have these guys

Spoiler: show

greenback is not going anywhere

96583UP wrote:we have a better central bank

Disagree

96583UP wrote:(now) better regulators

Disagree

96583UP wrote:we have accounting standards

I guess but okay?

96583UP wrote:don't have the risk of nationalization of industries

Disagree. And maybe the banking industry should face that risk?

96583UP wrote:even in the depths of the morass of the now-routine congressional debt ceiling standoff, it was known the U.S. Treasury planned to make debt service payments and force a constitutional crisis, rather than default on U.S. debt due to congressional inaction

So far yes. This can always change.

96583UP wrote:and if all that doesn't work, we still have these guys

Spoiler: show

Ugh. I guess.

96583UP wrote:greenback is not going anywhere

It will eventually. It's a matter of when and why.