Economy The Looming Debt Crisis

[Rob Battisti]

Might be good to start with a list of things that you are willing to give up that directly effect you.

What?

 

[Rob Battisti]

Debt can't be a concern for the Republicans if all they want to talk about is lowering taxes on the wealthy. They have failed to put forth any policies that would address the issue other than for cutting social programs. They don't talk about cutting money to any program that benefit the wealthy. If debt is a concern of yours we need to focus on raising taxes and taking the burden off of lower income people so they can earn more money to pay more taxes. Instead we have politicians that continue to ensure that there is a major wealth gap that is ever growing.

"OMG these poor won't work for a wage they can't live off of."

"Homeless people are a problem, poor people are a problem, immigrants are a problem, but don't you dare tax wealthy people anything."




Trickle down economics doesn't work and has constantly lead to gaps in the budget. Those who benefit the most from the system need to be the ones that bare the most burden on supporting the system they benefit from. Imagine complaining about Medicare and Medicaid when a major part of the expense of these programs goes to profitting private companies.


Sure none of us want to have a wasteful system, and we want our money to be spent efficiently. We want to see the benefits of our tax money. Yet we constantly elect officials that cut quality of life benefits for the poor, work to pass laws that eliminate workers rights, and ensure that we live in a police state. All while wanting to keep wealthy people super wealthy.

Nothing can be put forward to address this. As I’ve stated, this is going to be an ongoing issue. I also reiterated, it’s a global issue not just a US one.

But, by all means — anyone who wants to can feel free to just blow it off and say it’s no biggie.

 

[Jack V Savage]

I'm living fine, actually..

I think the covid pandemic may have eliminated your sense of humor

I guess if you never encounter anyone outside your bubble. But if your real-life MO is to issue cryptic partisan attacks and then give nasty responses to requests for clarity, it's not going to go well. And just the way you seem to get off on being obnoxious to strangers is a bad sign. I don't think happy people conduct themselves they way you do.

 

[Jack V Savage]

I love that the guy saying this isn’t a legitimate concern is calling me a hack for pointing out that we will only ever have perpetually growing debt from this point on.

"Pointing out?" You didn't respond when I pointed out it's been coming down. What's wrong with just discussing stuff honestly?

 

[KeepingItReal]

Our entire economic market system is predicated on infinite growth. Infinite is impossible in a finite resource system. That's the problem, and it is unsolvable unless we agree debt, to a certain extent, is inevitable.

Sure it's possible, because infinite losses are possible. That is to say, in a system when you can have perpetual loses, you can have perpetual growth, the two go hand in hand. Secondly, growth is a mental creation, it has nothing to do with resources. We are just taking stuff from one place on the planet and putting it in another place on the planet where we would rather have it, we call this work. The accounting of this is what we call growth.

 

[LMP]

Nothing can be put forward to address this. As I’ve stated, this is going to be an ongoing issue. I also reiterated, it’s a global issue not just a US one.

But, by all means — anyone who wants to can feel free to just blow it off and say it’s no biggie.

Sure we could increase taxes and cut spending. It's fairly simple. However the doom and gloom that debt is out of control isn't necessarily true. It's a strong talking point that keeps repeated, yet the people that use this talking point are against increasing revenue, so it has become increasingly dumb for them to use it.


Increasing revenue is pretty straightforward increase taxes. Making cuts is much more complicated. With cuts you can have major impacts on the economy. You could also focus on targeting wasteful spending and fraud, but this requires investment into the infrastructure of the government to be able to check for such things. When you have government officials that want to both cut taxes and cut the ability of the government to Crack down on waste and fraud You can not have efficiency with spending. Instead they just want to focus on gutting public assistance programs. This is a very inefficient way to run a government, and why "small government" politicians are frauds.

 

[Rob Battisti]

Sure we could increase taxes and cut spending. It's fairly simple. However the doom and gloom that debt is out of control isn't necessarily true. It's a strong talking point that keeps repeated, yet the people that use this talking point are against increasing revenue, so it has become increasingly dumb for them to use it.


Increasing revenue is pretty straightforward increase taxes. Making cuts is much more complicated. With cuts you can have major impacts on the economy. You could also focus on targeting wasteful spending and fraud, but this requires investment into the infrastructure of the government to be able to check for such things. When you have government officials that want to both cut taxes and cut the ability of the government to Crack down on waste and fraud You can not have efficiency with spending. Instead they just want to focus on gutting public assistance programs. This is a very inefficient way to run a government, and why "small government" politicians are frauds.

You do realize that it’s not as easy as “cut spending and increase taxes” right?

You can either be in the camp of “Debt doesn’t matter” but it’s a pretty incredible position to take when the interest were carrying is greater than the defense budget and our unfunded debt is 5x the National GDP.

Furthermore, it’s not just an American issue. Idk how “debt doesn’t matter” can be a position a rational person can take when the global debt to gdp ratio is over 300%.

This is why I said that the only way you can think it’s not a problem is if you simply think money is just an arbitrary thing that really doesn’t matter.

 

[LMP]

You do realize that it’s not as easy as “cut spending and increase taxes” right?

You can either be in the camp of “Debt doesn’t matter” but it’s a pretty incredible position to take when the interest were carrying is greater than the defense budget and our unfunded debt is 5x the National GDP.

Furthermore, it’s not just an American issue. Idk how “debt doesn’t matter” can be a position a rational person can take when the global debt to gdp ratio is over 300%.

This is why I said that the only way you can think it’s not a problem is if you simply think money is just an arbitrary thing that really doesn’t matter.

If the goal is to reduce debt then it is a matter of increasing revenue over the amount of spending. So if we are going by the talking points of how debt is bad and will lead to a crisis, then the solution is straightforward. However National debt is not the same as household debt, especially for the US.

Debt to increase potential revenue or security is fine. These are two thing a country must have. As we increase debt(make new money) we cause inflation which can be a major problem, if wages do not increase as fast as the inflation. As we take in revenue/taxes (destroy money) we should be reducing inflation. So debt doesn't necessarily matter but definitely could become an issue. So increasing debt with a strong/stable economy, isn't nearly as big of an issue as having a failing economy and increasing debt.

 

[Jack V Savage]

You do realize that it’s not as easy as “cut spending and increase taxes” right?

You can either be in the camp of “Debt doesn’t matter” but it’s a pretty incredible position to take when the interest were carrying is greater than the defense budget and our unfunded debt is 5x the National GDP.

Furthermore, it’s not just an American issue. Idk how “debt doesn’t matter” can be a position a rational person can take when the global debt to gdp ratio is over 300%.

This is why I said that the only way you can think it’s not a problem is if you simply think money is just an arbitrary thing that really doesn’t matter.

Debt matters and money is real, but you're still pushing nonsense doomerism. I think the key metric to look at it is debt interest to GDP, and it's a bit high now, though well below the levels of the '90s (and thus clearly not a crisis, but something we want to reduce). It's annoying that you can't be honest about the discussion.

 

[aerius]

What if we globally decide to forgive all debt and start over

This will likely need to happen at some point, the concept of a debt jubilee goes back to biblical times. How we do this and what happens as a result is uncharted territory. We've done it on a small scale where smaller nations have defaulted on their debts and started anew with varying degrees of success, but we simply have no idea of what will happen if we tried this on a global scale or what this would even look like. It's essentially an outside context problem.

Also, I have more questions than answers. For example: how does any nation truly enforce a debt issue against another country? Let's take the Chinese debt traps for example -- if a nation defaulted on a Chinese loan and refused to turn over some national resource to China as satisfaction for the debt...how does China get paid? Sanctions? Enforced by whom?

Historically there were 2 basic solutions. Do nothing, accept that it's a bad debt which can never be repaid, write it off, and move on. Or we forcibly take everything that is owed by the nation which owes the debt, this is probably the more common solution and how many wars have started.

This swings back to the larger issue about real world consequences. Who enforces sanctions against us? It seems to all boil down to who has the bigger coalition and once you're part of a big enough coalition, no one is going to heavily penalize the other debtors in the group because they don't want themselves to be penalized later.

He who owns the bigger stick wins, generally speaking. If we're talking about the global powers, well, we quickly hit the outside context stage where no one knows WTF is going on, but the risk of doing something is mutually assured destruction (it may or may not be, but is generally perceived as such) so no one wants to make the first move. But someone will eventually be forced to, something's gonna get triggered at some point and then all bets are off. It might end up being a nothing-burger, or it might end the world as we know it, we know the risk of the latter exists so we end up in what is analysis paralysis.