|
Shut up dr no one likes you.
|
#
?
Sep 17, 2017 02:50
|
|
|
|
| # ? May 23, 2024 14:37 |
|
|
BardoTheConsumer posted:Could someone help me out here? What prevents ever increasing debt from, for example, reaching a level of interest the US simply can't pay? It could happen, but it would have to be extremely high. Nations have had several times our debt to GDP ratio in the past with no ill effect.
|
|
#
?
Sep 17, 2017 03:02
|
|
|
PerniciousKnid posted:It could happen, but it would have to be extremely high. Nations have had several times our debt to GDP ratio in the past with no ill effect. I see. So it's doomsaying about a potential thing that could maybe happen if we continue to be shortsighted forever?
|
|
#
?
Sep 17, 2017 03:09
|
|
|
BardoTheConsumer posted:I see. So it's doomsaying about a potential thing that could maybe happen if we continue to be shortsighted forever? The main thing to keep in mind right now is that the US is able to borrow money at incredibly low interest rates, like around the rate of inflation (sometimes below). The problem only is when the money raised by issuing that debt is used in a manner that is non-conductive for economic growth. Coincidentally the party that makes the most noise about DEBT is also the one that prefers for the money to go towards those things that are non-conductive to economic growth.
|
|
#
?
Sep 17, 2017 03:13
|
|
|
UberJew posted:The judge was acting in the fine tradition of American jurisprudence embodied by Scalia and wrote whatever fit the conclusion he wanted to reach. The exact same judge absolutely could and would have written an equally persuasive opinion to the contrary on the exact same facts if he cared to, but left that line in so the police know he has always got their back. It's a loving crime that police officers can opt for a bench trial when they're the defendant for on the job behavior (or possibly in any trial) due to the nature of the relationship between cops and judges. It's also questionable whether or not a standard prosecutor should be allowed in cases like that since they work with prosecutors so often. Out of the gate they have so many advantages over an ordinary citizen just due to their position and relationship to the legal system as a whole.
|
|
#
?
Sep 17, 2017 03:15
|
|
|
BardoTheConsumer posted:I see. So it's doomsaying about a potential thing that could maybe happen if we continue to be shortsighted forever? Nah, there's no necessity of ever paying it off. We still owe lots of money from WWII. The economy has grown so much that debt has shrunk to insignificance. An important point to remember is that the government can create and destroy money at will. You can't treat it like a household budget.
|
|
#
?
Sep 17, 2017 03:16
|
|
|
I've said elsewhere, but government literally has the cheat codes for the economy. This is by design. Politicians don't want people realising the full ramifications of that.
|
|
#
?
Sep 17, 2017 03:27
|
|
|
BardoTheConsumer posted:I see. So it's doomsaying about a potential thing that could maybe happen if we continue to be shortsighted forever? Yes. Right now it isn't much of an issue because our economy growing strong. If debt grows at an unsustainable rate you either have to increase inflation by printing money or balance the budget at some point. The US relies on strong economic growth to make our past debt irrelevant. If growth slows long term there will be problems. The thing is that organizations that buy debt take that probability into account. So if they start thinking it is likely that the US government will start printing money they'll want higher interest rates to offset the risk of inflation. The US is rolling debt forward in 10 year notes. So every 10 years we fully cycle through the $20T or so in debt we have. Right now we pay basically nothing in interest. If the market starts demanding higher rates we can quickly find ourselves in a position where our year budget gets blown up because we have to make much larger payments to service the debt. This can lead to a cycle of hyper inflation if the government just starts printing unlimited money. This is a real risk. You can't simply print money to pay off the debt with out consequences. The real question is how far from this are we? We're probably at least a a couple of decades out at the current rates. But all of this can change. If economic growth picks up then the time line gets longer. If the economy slows and the debt markets start worrying the timeline gets shorter. The US is a insulated from this because when the debt market gets worried they buy our bonds. During the Financial Crisis in 2008 the interest rate on treasuries was negative for a while. People were willing to fork over $100.1 million for a guarantee of getting $100 million in 10 years. Edit: https://en.wikipedia.org/wiki/List_of_countries_by_public_debt Greece is roughly twice our ratio and are in a world of hurt. Japan is the next closest and has a "lost decade", a scenario of near 0 growth over an entire decade Xae fucked around with this message at 03:39 on Sep 17, 2017 |
|
#
?
Sep 17, 2017 03:34
|
|
|
One of the things that can drive up the interest rate for government borrowing is talk about a default.
|
|
#
?
Sep 17, 2017 03:37
|
|
|
Dead Reckoning posted:Give me a call when you've solved the reality of limited resources. You understand you are saying this from rhetorical equivalent of the guy who gets free anesthesia when he goes to the doctor roght? your position of "gently caress the homeless" requires no hard decisions from you whatsoever. How lucky you are that everything remaining the same works out for you. But no, it is everyone else that is being childish, you smug gently caress
|
|
#
?
Sep 17, 2017 03:38
|
|
|
Xae posted:Yes. Taerkar posted:The main thing to keep in mind right now is that the US is able to borrow money at incredibly low interest rates, like around the rate of inflation (sometimes below). The problem only is when the money raised by issuing that debt is used in a manner that is non-conductive for economic growth. Both of these points are very interesting! Thank you both. I knew it was different from household or corporate budgeting but I just couldn't really work out why. I appreciate it
|
|
#
?
Sep 17, 2017 03:51
|
|
|
Dead Reckoning posted:Give me a call when you've solved the reality of limited resources. Ladies and gentlgoons, I present to you "A triggered sociopath". A play in one act. Snark aside you are arguing that we must solve literally every problem with society and be damned certain that helping homeless people won't inadvertently hurt us before we do anything to help the homeless. You lack the ability to process human empathy and it really shows here. Your entire line of logic does not incorporate basic understanding of human empathy (and basic humanity really) that are underpinning requirements in order to even have a functional society. All joking aside, you should see a mental health professional because it won't take them long to reach the same conclusion. In conclusion: Mustached Demon posted:Shut up dr no one likes you.
|
|
#
?
Sep 17, 2017 03:51
|
|
|
BardoTheConsumer posted:Both of these points are very interesting! Thank you both. I knew it was different from household or corporate budgeting but I just couldn't really work out why. I appreciate it Also, not directly what you asked, but printing money doesn't necessarily cause proportional or even noticeable inflation. If there's enough slack productivity to absorb it, the economy just produces more widgets and charges the same price for them as they otherwise would. Conveniently, guess whether possible supply outstrips demand right now  Edit: DR may be sociopathic but he's also dumb and had at cost benefit on this issue and so I don't think the first one is really the problem It's possible to be bad at empathy and still arrive at humane and good policy positions E.g., the discipline of economics Goatse James Bond fucked around with this message at 04:03 on Sep 17, 2017 |
|
#
?
Sep 17, 2017 04:00
|
|
|
Xae posted:This is a real risk. You can't simply print money to pay off the debt with out consequences.
|
|
#
?
Sep 17, 2017 04:05
|
|
|
PerniciousKnid posted:It's hard to see how this would be a problem, though. A growing economy makes it easier to pay off debt. A shrinking economy usually reduces rates. So you're okay in both situations. Yeah, the Fed quintupled the money supply after the 2008 recession and inflation didn't budge a bit. Inflation is fundamentally the result of too much money chasing too few goods. If there's plenty of goods available (i.e. insufficient damand), it doesn't matter how much money is around.
|
|
#
?
Sep 17, 2017 04:09
|
|
|
PerniciousKnid posted:It's hard to see how this would be a problem, though. A growing economy makes it easier to pay off debt. A shrinking economy usually reduces rates. So you're okay in both situations. What rate would a shrinking economy reduce? Deteriorata posted:Yeah, the Fed quintupled the money supply after the 2008 recession and inflation didn't budge a bit. The financial collapse was a deflationary pressure. They explicitly printed money to counter it because deflation is extremely bad. In a normal situation quadrupling the money supply would cause severe inflation.
|
|
#
?
Sep 17, 2017 04:11
|
|
|
Xae posted:What rate would a shrinking economy reduce? Well, yes. The 2008 recession was not an ordinary situation. The point is that printing money doesn't necessarily lead to inflation. It can, but doesn't have to.
|
|
#
?
Sep 17, 2017 04:13
|
|
|
GreyjoyBastard posted:
Point taken. Years back I knew a guy who was legit former spec ops, we were both driving instructors for 18-wheelers on the same company account. Dude and I had many fascinating discussions where he talked very plainly about lacking almost all sense of empathy (had had a wife and kid that he referred to as "wife" and "kid") and he was both pro LGBT rights and leaned hard left politically. (Huge 2nd amendment nut though) He wouldn't accept an argument without evidence but he genuinely didn't have any attachment to a preset position on a given topic and was pretty open to any reasonable argument. Fascinating guy, extremely intelligent and a very considered viewpoint on most topics. He also had an unusually good sense of exactly what his limitations were as a human being. A truly unique interlocutor that I must confess I rather miss having discussions with. Prester Jane fucked around with this message at 04:16 on Sep 17, 2017 |
|
#
?
Sep 17, 2017 04:14
|
|
|
Xae posted:What rate would a shrinking economy reduce? Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me
|
|
#
?
Sep 17, 2017 04:15
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me Your wages will go down because of the increased purchasing power of money but your debts will remain the same. In deflation wage earners rapidly lose ground against their outstanding debts, forcing fierce competition and driving wages down even further.
|
|
#
?
Sep 17, 2017 04:18
|
|
|
you can in fact print money to pay off debt or so that you never need to incur it in the first place, up to a hard limit imposed by currency inflation. this is what governments throughout history, particularly monarchies, did all the time the US is in a privileged position with respect to inflation since the dollar is the global reserve currency and US federal securities are the investment of choice when capital seeks stability. this means that we can probably spend an absolutely eye-popping amount of money compared to the current federal budget without running into unmanageable inflation, which would make the economy much healthier if it were spent on stuff like MfA, a basic income, homelessness aid, insert your choice of social solutions here, and that would open up more room to spend more money Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me your debt gets harder to pay off because as deflation occurs you'll be paid less (since each dollar is worth more) while your debt remains the same conversely, inflation is good for a common person as long as it isn't hyperinflation
|
|
#
?
Sep 17, 2017 04:19
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me Why spend money today when it will be worth more tomorrow? Why invest money when deflation is giving you a guaranteed rate of return? The economy ends up shrinking because there is no incentive to spend. Which lowers prices. Which reduces demand. You can end up in a Deflationary Spiral It also can be thought of as additional interest on any debt you have. Your effective interest rate is Interest - Inflation If Inflation is negative then you're adding to the interest rate you pay because future money is more valuable than present money.
|
|
#
?
Sep 17, 2017 04:20
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me If you have any debt it becomes more difficult to pay it back as you wages shrink or stagnate while the interest stays the same. Common American men have lots of debt. edit: drat beaten down like an economy in a deflationary spiral. Squalid fucked around with this message at 04:23 on Sep 17, 2017 |
|
#
?
Sep 17, 2017 04:21
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me Basically in a deflation scenario money becomes worth more if you hold onto it, so people hold onto it. Since (very broadly) its the circulation, not the amount, of money that causes the economy to work there ends up being less economic activity than there otherwise would be because people with money have fewer incentives to spend it. To put it another way, prices drop, but it's harder to get money.
|
|
#
?
Sep 17, 2017 04:21
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me 1) Existing loans become better for the lender and worse for the borrower. This isn't necessarily an unalloyed bad, but it does explain why conversely inflation annoys the finance industry. 2) Deflation reduces the global propensity to spend and increases the global propensity to save for the people not living paycheck to paycheck. In a consumer driven economy such as, uh, all of them at this time, this is bad and also it leads to companies producing less (because reduced demand), which means the people they pay (you!) have less money to spend, so you spend less, so the companies produce less, and then everything burns to the ground. Efb, thanks phone posting, but I still contributed a more detailed woest case scenario
|
|
#
?
Sep 17, 2017 04:21
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me Deflation means that cash gains value over time. That means that stuffing cash in a mattress is preferable to having it in a bank. Companies will hoard cash rather than spending it and taking on debt. Money stops ciruculating because it's better to hold it than spend it. People lose their jobs and go hungry. The economy grinds to a halt. See what the US economy was like from '29 to '32. Inflation means that money loses value over time, so you're better off spending it. Companies are incentivized to take on debt because the value of their debt decreases with time, so they are more willing to invest in new facilities. Prices go up, but so do wages. An annual inflation rate of about 2-3% helps maintain a healthy economy and gives the Fed some room to cut interest rates when a recession hits.
|
|
#
?
Sep 17, 2017 04:22
|
|
|
Unoriginal Name posted:Could you explain to me, a common man with minimal savings or intellect, why deflation is bad for me Deflation is really only good if you, personally, have lots of money. Otherwise, it can wreck havoc with consumers, as their debts are now worth more than they'd initially planned, while the number of dollars wage earners get goes down (but is still worth the same as value as the previous pay). However, since the number of dollars your debt has doesn't go down, more of your income goes to debt servicing instead of consumption. Edit: holy crap was I late to the party
|
|
#
?
Sep 17, 2017 04:24
|
|
|
What the hell is this, Economist Night?
|
|
#
?
Sep 17, 2017 04:24
|
|
|
Dead Reckoning posted:Oh cool, all we need to do is totally re-orient our economy without any of the corruption, waste and violence that normally accompanies such affairs. I'm sure glad we don't have to think about scarcity any more. You child. Observing that there is enough wealth in the economy to do what you want is like observing that we have enough steel in the world to build a ladder to the moon: pointless and naive. Other people get a say, and planning without considering what resources you might reasonably utilize isn't planning at all. "Oh but we can do all things at once and never have to make hard choices as soon as we seamlessly harness our economic output to Full Socialism Now" is a fantasy to avoid making uncomfortable decisions, to avoid having to make the judgments you don't want to make. You want to run our society like a person who never goes to the doctor because they hate bad news, who never goes to the dentist because they're afraid of pain. You know I actually feel really sorry for you, do you know that? I do. Not because of your deep-seated internet cynicism or your lovely opinions, no. Those are normal. Not because your response to "actually we have options to make this work" is to call me a child, for some reason? Which, you know, if I had to point out how childish that was... Anyway, no, I feel sorry for you because when faced with the idea that it is theoretically possible to change things and make a big dent in the homelessness problem, and the idea of reallocating governmental and economic resources to achieve that, your response is "lol how naive". Your response to the idea that we can help people is to scoff. Ebenezer Scrooge at least had the decency to be honest about his preference for not helping - you instead desperately want to be seen as "reasonable" and that you wish people could do more but, oh gosh, the economy and people might not like the cost and and and...it must suck to live that kind of a life where you can't conceive of the idea of trying to use government to loving help people. In any case, you'll note that I never said that it would be easy, either practically or politically, to get this done. And it wouldn't be! Which is, as you will note, why I did not say that. What I did say is that the resources are there. We could raise taxes in certain sectors and use that money to help people who need help. We could also do any number of other things to free up some money; we could scale back military R&D or deployments, we could allow the government to more aggressively negotiate pricing under Medicare/Medicaid, we could roll back subsidies or tax credits or incentives for industries that really don't need them anymore, we could do all kinds of things. We have options. The fact that we do not is a societal choice, not an economic impossibility. Would it be hard to marshal popular support for something like that? Probably! Is it worth trying to do so? Also probably! 9 years ago it was insanity to think any major reform of the healthcare system in this country could ever happen. And here we are. It isn't perfect, it doesn't do all it needs to do, but goddamn, it helped people, even in the face of people saying it'd never work. Saying that something is possible isn't saying it's going to be easy, it's just saying that if it's a thing we care about, then there are tools to get us to the result we want. And I'm sorry you can't see the difference. Fraction Jackson fucked around with this message at 04:28 on Sep 17, 2017 |
|
#
?
Sep 17, 2017 04:24
|
|
|
GreyjoyBastard posted:What the hell is this, Economist Night? It's a weekend, obviously anyone with an interest in economics is at home on the internet wondering why no one invites them to parties.
|
|
#
?
Sep 17, 2017 04:25
|
|
|
GreyjoyBastard posted:What the hell is this, Economist Night? well the government's dragon-like unreasonable miserliness is kind of the overarching issue driving an awful lot of current events
|
|
#
?
Sep 17, 2017 04:25
|
|
|
GreyjoyBastard posted:What the hell is this, Economist Night? Keynesians drink free 
|
|
#
?
Sep 17, 2017 04:26
|
|
|
Jazerus posted:well the government's dragon-like unreasonable miserliness is kind of the overarching issue driving an awful lot of current events I was a participant
|
|
#
?
Sep 17, 2017 04:27
|
|
|
RuanGacho posted:Keynesians drink free There's no such thing as a free drink, but mine's a double if you're buying.
|
|
#
?
Sep 17, 2017 04:27
|
|
|
farraday posted:It's a weekend, obviously anyone with an interest in economics is at home on the internet wondering why no one invites them to parties. Heh, you should seen what the USPOL thread looked like circa June 2009. Half this friggin forum had a nuanced opinion on each round of Quantitative Easing (the official name of printing money) and each new round of QE set this forum hurling charts and bad economic theories around like it was going out of style. On the plus side though boy howdy did I ever learn a shitload about how the economy worked back then. Snapped my naive rear end out of believing a ton of dumb libertarian poo poo once I started realizing just how complicated and interconnected everything was. On the double plus side that was also pretty much when Libertarianism started to become a very dirty word on these forums instead of a viable economic theory.
|
|
#
?
Sep 17, 2017 04:33
|
|
|
Prester Jane posted:
Majoring in economics no poo poo took me from a quasi libertarian to a social democrat bordering on democratic socialist. For some reason this surprises some people, presumably because the Chicago School assholes and similar dickbags are/were among the noisiest.
|
|
#
?
Sep 17, 2017 04:39
|
|
|
It's not what you major in school but what career you go into. I have a lot of posh friends from the UK who were Oxford socialists but became stereotypical FYGMers after going into finance.
|
|
#
?
Sep 17, 2017 04:43
|
|
|
I am in a Microeconomics class right now where the teacher is a big free market person, to the point where at the end of one class we watched a video of Milton Friedman answering a college student's question to him as only a smug libertarian economist can, and we've had multiple moments where someone will ask her a question about the free market that leads to a conversation that concludes with someone just saying "oh well I disagree with that" which is the nice, non-grade-affecting way to say "oh that's real dumb". I genuinely have faith that the millennial generation will push the government harder to the left than anyone since FDR because of things like that, but first we have to remove from power anyone old enough to have voted for Ronald Reagan (especially if they actually voted for Ronald Reagan).
|
|
#
?
Sep 17, 2017 04:49
|
|
|
DC Murderverse posted:
I yearn for boomer shitbag death.
|
|
#
?
Sep 17, 2017 05:18
|
|
|
|
| # ? May 23, 2024 14:37 |
|
|
DC Murderverse posted:we watched a video of Milton Friedman answering a college student's question to him as only a smug libertarian economist can, There is a qualitative epistemological difference between the Chicago school and Austrians. And here it is: https://www.google.com/url?sa=t&sou...M_DJbvCfaRRl82A I'm not going to disagree that Friedman is a smug poo poo. But I've moved from Chicago school to a Keynesian eyeing marxism over about a decade. One conflates when Friedman is lumped with Austrian libertarians. I wrote a hell of a essay a couple years back in grad school that used Krugman and Friedman at length to argue that evidence must be the foundation of economics. One can't do that with any of the Libertarian Austrians.
|
|
#
?
Sep 17, 2017 05:58
|
|
