[Doomsday Economics] your economic system is a piece of shit

The Something Awful Forums > Discussion > C-SPAM > [Doomsday Economics] your economic system is a piece of shit

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(Thread IKs: skooma512)

Oglethorpe: Aug 8, 2005; Avatar blanked by Admin request.

The Bigger Short

# ? May 23, 2023 18:19

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# ? Jun 6, 2024 19:15

StratGoatCom: Aug 6, 2019; Our security is guaranteed by being able to melt the eyeballs of any other forum's denizens at 15 minutes notice

https://twitter.com/ceeoreo_/status/1660674844302749698

# ? May 23, 2023 18:21

skooma512: Feb 8, 2012; You couldn't grok my race car, but you dug the roadside blur.

Mr Hootington posted:

I mean that is correct. We do not have enough lithium to replace every car.

And then again in 8 years or whatever when the batteries in every car we've magically replaced petrol cars with needs another one.

Using up the world's lithium supply, and then having to do it all over again in a decade, and every decade thereafter until a magic new battery shows up or we give up trying to do this poo poo.

# ? May 23, 2023 18:22

Egg Moron: Jul 21, 2003; the dreams of the delighting void

Xaris posted:

drat 750k in San Jose is super cheap

but ya I grew up Sonoma county and most were like 100-200k up until 2004 then exploded to 500-700k then down to 350-600 after gfc then have spiked again to 800-1.6 million

destroy all doughy white Wisconsinite transplants

The Midwest exporting their gifted kids to the coast has destroyed society

# ? May 23, 2023 18:26

FlapYoJacks: Feb 12, 2009

# ? May 23, 2023 18:33

Mr Hootington: Jul 24, 2008; I'M HAVING A HOOT EATING CORNETTE THE LONG WAY

Retweeted by Adam tooze
https://twitter.com/wonkmonk_/status/1466425265790279691?t=R6IbcqLhvInuAWm8-98elw&s=19

# ? May 23, 2023 18:36

webcams for christ: Nov 2, 2005

the debt ceiling is simply political theater to justify austerity, but persuasive arguments about Biden's other options help illustrate to a broader audience that the Democrats are operating in bad faith

https://twitter.com/pplpolicyproj/status/1661018725196390404

Matt Bruenig posted:

The Debt Limit Situation

Biden has a variety of ways to ignore the debt limit. He has no way to legally follow it.

Within the US constitutional system, the power to make laws is vested in Congress. This power includes the power to raise revenue through taxation and other means, to borrow money, and to engage in public spending. The president is then required to execute these fiscal laws as written.

There is a potential problem in this structure, which is that Congress could pass laws directing the president to spend a certain amount of money without passing laws to finance that spending. In this scenario, it is impossible for the president to follow the law. If he executes the spending by unilaterally financing it through tax hikes, bond sales, or similar, then he has usurped financing authority that is vested solely in Congress. If he unilaterally forgoes some or all of the spending mandated by Congress in order to stay within the financial constraints, then he has usurped the spending authority that is vested solely in Congress.

As far as I know, this potential problem has never arisen historically. Before 1917, Congress financed all of the spending it mandated, including by authorizing each and every bond sale. After 1917, Congress made it so that the president was always authorized to sell bonds in order to finance any spending that exceeded other revenue sources. So, in this scenario, bond sales became the residual funding mechanism used to ensure that the following equation was always in balance.

But this permanent authorization to sell bonds to balance this equation has one caveat, which is that it is subject to a debt limit. This means that when the total face value of the bonds outstanding hits a certain dollar amount, currently $31.4 trillion, the president is no longer authorized to sell bonds in order to balance this equation.

But if he can�t use bond sales to balance the equation, then how is he supposed to balance it?

As discussed already, he can�t refuse to do spending that Congress has directed him to do. He also can�t unilaterally raise taxes or sell off public assets like the USPS or federal lands. The return on federal assets is not something that you can just dial up through executive fiat as it depends on market conditions. Lastly, the right to engage in seigniorage (i.e. money creation) is something that the Federal Reserve has, but not something the Treasury is generally regarded as having.

So, if you approach this issue conventionally, you are forced to conclude that, when the debt limit is hit, it is literally impossible for the president to follow the law, that Congress has essentially passed a set of laws that direct the president to do X and not-X at the same time.
All of the unconventional approaches to this conundrum work by finding authority for the president to do one of the financing activities that he appears to not be allowed to do. So far, this search for authority has primarily focused on the last two financing streams in the equation above: seigniorage and bond sales.

Although the Treasury is not generally regarded as having the right to engage in seigniorage, 31 USC 5112(k) gives the Treasury the authority to mint platinum coins in any denomination. On its face, this could be read as giving the Treasury unlimited authority to engage in seigniorage provided it is done through the minting of platinum coins. And logically, if such authority exists, and if the president cannot sell more bonds because of the debt limit, then the president must use this kind of seigniorage to finance the spending mandated by Congress. It is the only way for the president to not violate any laws.

Although the debt limit appears to forbid bond sales beyond $31.4 trillion, this dollar amount is arrived at by adding up the �face value� of all of the outstanding bonds. But the face value of bonds can be manipulated by changing the bond�s coupon. For example, the treasury could issue bonds with a face value of $0 that only paid its holders a set amount of interest each year for a certain number of years. In this scenario, people would still buy the bonds in order to receive the interest, but there would be no principal and thus no face value. As with the seigniorage scenario above, if the Treasury has the authority to issue zero-principal bonds, then the president must legally do so in order to finance the spending mandated by Congress.

Beyond zero-principal bonds, there are two other approaches to engaging in bond sales despite the debt limit. The first is to point to the part of the 14th amendment that says �the validity of the public debt of the United States � shall not be questioned� in order to argue that the debt limit statute is itself unconstitutional. The second is to rehearse the point above that the situation set up by the debt limit makes it literally impossible for the president to not violate the law (whether tax laws, debt laws, or spending laws) and then say that, between these lawbreaking options, violating the debt limit law is the least lawbreaking course of action.

The president could also illegally raise taxes or illegally sell off public assets to balance the equation, though so far nobody has really advocated for those lawbreaking approaches.

In the last week or so, there has been a bit of a crackup among liberal pundits on this topic, with many now suggesting that Biden can�t use any of these approaches and has to strike a deal on raising the debt limit. According to this argument, none of these alternative approaches will work because ultimately the conservative Supreme Court will rule against them.

But liberals who say this remain very unclear about what they think the Supreme Court ruling would actually be. If you keep the question abstract, you can just say something like �the Supreme Court will uphold the constitutionality of the debt limit� or something very reasonable-sounding like that. But this abstract gloss misunderstands the actual legal question that the Supreme Court would have to answer, which is not whether the debt limit is constitutional, but rather what must the president do when Congress mandates an amount of spending that exceeds the amount of authorized financing?

Is the Supreme Court going to rule that, in that scenario, the president has the constitutional authority to unilaterally disregard some of the spending Congress has mandated the president to do? In this scenario, does the president get to choose what spending to disregard, sort of like a line-item veto, which the court has already ruled is unconstitutional even when Congress specifically passes a law giving the president line-item veto rights? Could Biden eliminate the entire Department of Defense once the debt limit is hit in order to get aggregate spending down to the levels financed by Congress?

There is no coherent way for the Supreme Court to actually resolve this kind of legal issue and the most ridiculous possible way for them to resolve it � especially within conservative jurisprudence � would be finding that the debt limit statute, without explicitly saying so, gives the president the authority to ignore whatever spending laws he wants in the event of a debt limit breach. Given these difficulties, it seems far more likely to me that the Supreme Court would just decline to rule, citing the Political Questions doctrine.

Based on all of the above, my current thinking on the best way for Biden to deal with the debt limit is to sell zero-principal bonds. These would not count as debt under the wording of the debt limit statute because they have a $0 face value. If this was challenged, then the administration has three different defenses to the challenge: that zero-principal bonds do not contribute to the debt limit, that the debt limit is unconstitutional, and that illegally selling bonds is no more unconstitutional than illegally raising taxes, selling assets, or cutting spending.

But whichever course of action Biden chooses, we should be clear that he has other options than agreeing to crack the whip against America�s poor.

and relevant follow-up:

https://twitter.com/mattbruenig/status/1661042764614717443

webcams for christ has issued a correction as of 18:40 on May 23, 2023

# ? May 23, 2023 18:38

Mr Hootington: Jul 24, 2008; I'M HAVING A HOOT EATING CORNETTE THE LONG WAY

webcams for christ posted:

the debt ceiling is simply political theater to justify austerity, but persuasive arguments about Biden's other options help illustrate to a broader audience that the Democrats are operating in bad faith

https://twitter.com/pplpolicyproj/status/1661018725196390404

and relevant follow-up:

https://twitter.com/mattbruenig/status/1661042764614717443

https://twitter.com/ddayen/status/1661051205769109505?t=8nMPhlOEGyNGoAUbZwAFNw&s=19

# ? May 23, 2023 18:44

Nothus: Feb 22, 2001; Buglord

Mr Hootington posted:

https://twitter.com/ddayen/status/1661051205769109505?t=8nMPhlOEGyNGoAUbZwAFNw&s=19

lmao, mask off

# ? May 23, 2023 18:46

Mr Hootington: Jul 24, 2008; I'M HAVING A HOOT EATING CORNETTE THE LONG WAY

Going to advertise this thread here, but a general chat thread has been started.
https://forums.somethingawful.com/showthread.php?threadid=4030492&pagenumber=39&perpage=40

# ? May 23, 2023 18:47

HallelujahLee: May 3, 2009; Can't post for 5 hours!

it wasent a very good mask

# ? May 23, 2023 18:47

Good Soldier Svejk: Jul 5, 2010

Biden wants a default

he's an accelerationist, too

# ? May 23, 2023 18:50

alarumklok: Jun 30, 2012

lol biben

# ? May 23, 2023 18:51

cat botherer: Jan 6, 2022; I am interested in most phases of data processing.

lmao all those threats to mint the coin or invoke the 14th amendment is really good kayfabe.

# ? May 23, 2023 18:57

JAY ZERO SUM GAME: Oct 18, 2005; Walter.
I know you know how to do this.
Get up.

the people who make the rules can choose to make new ones

if they don't, it's because they like the outcome of the current rules

simple as

# ? May 23, 2023 18:58

Nothus: Feb 22, 2001; Buglord

https://twitter.com/paulkrugman/status/1661000816923123712?s=20

lmao more like Paul Kredulous

# ? May 23, 2023 19:00

Thorn Wishes Talon: Oct 18, 2014; by Fluffdaddy

Paradoxish posted:

The "market" in general has taken on an extremely sanguine attitude, forever assured that number only go up. The perma-bull thing really took off after 2008, and you can see it absolutely everywhere. The manufactured debt crisis is one thing, but the same poo poo pops up with the market pricing delusional interest rate behavior. Bad news is good news. Good news is good news. No news is good news. It's all good news, which makes the entire concept of a stock market completely insane and meaningless.

The idea that the market needs to crash to scare politicians is ridiculous, but the markets aren't really engaging in any kind of legitimate price discovery. Investors aren't pricing in the state of the economy or even the state/future prospects of any individual asset, they're just pricing in whether or not number will go up. And the answer is always yes, because the government will always step in to save them.

this is correct

it doesn't help that for the past three decades americans have been conditioned to mindlessly dump all their retirement savings into stocks on the basis that number always goes up in the long run, which has kind of turned it into a self-fulfilling prophecy. but in the process it has absolutely corrupted it into a wildly irrational way to build wealth (irrational as in decoupled from material realities, i.e. the real economy) and destroyed its actual purpose, which is efficient allocation of resources via price discovery

# ? May 23, 2023 19:02

Turtle Sandbox: Dec 31, 2007; by Fluffdaddy

"The Market" is simply our God.

# ? May 23, 2023 19:07

Wraith of J.O.I.: Jan 25, 2012

Turtle Sandbox posted:

"The Market" is simply our God.

# ? May 23, 2023 19:08

Mr. Lobe: Feb 23, 2007; ... Dry bones...

Turtle Sandbox posted:

"The Market" is simply our God.

Attack and dethrone God

# ? May 23, 2023 19:10

RealityWarCriminal: Aug 10, 2016

webcams for christ posted:

and relevant follow-up:

https://twitter.com/mattbruenig/status/1661042764614717443

somehow I don't think this scotus will have a problem with it

# ? May 23, 2023 19:12

Frosted Flake: Sep 13, 2011; Semper Shitpost Ubique

StratGoatCom posted:

https://twitter.com/ceeoreo_/status/1660674844302749698

# ? May 23, 2023 19:24

Thoguh: Nov 8, 2002; College Slice

Nothus posted:

https://twitter.com/paulkrugman/status/1661000816923123712?s=20

lmao more like Paul Kredulous

Hey now, they also control the Supreme Court so it�s 50/50.

# ? May 23, 2023 19:30

anonumos: Jul 14, 2005; Fuck it.

Orvin posted:

There was an editorial on CNN that maybe the market needs to implode to get congress off its rear end.

https://www.cnn.com/2023/05/22/business/washington-wall-street-debt-ceiling/index.html

quote:

Perhaps this indifference is because investors have seen this drama before. They know how it ends: with politicians waiting until the last minute before giving in and finally raising the debt ceiling before disaster strikes.

…

“A selloff in stock and bond markets may be what’s required to get donors and voters to pound on lawmakers’ doors to stop the drama and increase the limit,” Mark Zandi, chief economist at Moody’s Analytics, told CNN on Monday.

…

In some ways, the calm mood in markets is acting like a feedback loop. Investors are betting it’ll all get taken care of. Lawmakers are in no rush because the markets are not freaking out. Rinse and repeat.

How could it all be a confidence game? How??

-Shocked Pikachu

# ? May 23, 2023 19:41

err: Apr 11, 2005; I carry my own weight no matter how heavy this shit gets...

StratGoatCom posted:

https://twitter.com/ceeoreo_/status/1660674844302749698

why are people so defensive about this? businesses have a real opportunity to cut labor costs and leftists are basically, "no way buddy, IM DIFFERENT"

# ? May 23, 2023 19:45

Pepe Silvia Browne: Jan 1, 2007

err posted:

why are people so defensive about this? businesses have a real opportunity to cut labor costs and leftists are basically, "no way buddy, IM DIFFERENT"

Nobody thinks they can be replaced by a robot cuz they think it means a robot literally doing their job and not enabling one guy to do their job and five other peoples in the same amount of time.

# ? May 23, 2023 19:49

webcams for christ: Nov 2, 2005

RealityWarCriminal posted:

somehow I don't think this scotus will have a problem with it

of course not, but the fact that not only aren't the democrats willing to try, they're filing loving motions like this:

Mr Hootington posted:

https://twitter.com/ddayen/status/1661051205769109505?t=8nMPhlOEGyNGoAUbZwAFNw&s=19

is all you need to know that they actively want to manufacture justification for more austerity

# ? May 23, 2023 19:53

webcams for christ: Nov 2, 2005

err posted:

why are people so defensive about this? businesses have a real opportunity to cut labor costs and leftists are basically, "no way buddy, IM DIFFERENT"

businesses will use LLMs and other generative models to eliminate positions and increase output demands, but it very much remains to be seen how much actual Productivity so called "AI" will yield in the near future. there's a chance that it will actually negatively affect the Productivity of early adopting firms, but it won't matter because their stock valuations will go up because of the hype

# ? May 23, 2023 19:57

Spaced God: Feb 8, 2014; All torment, trouble, wonder and amazement
Inhabits here: some heavenly power guide us
Out of this fearful country!

Also LLMs have an insane spool up price and require tons of hardware to run and maintain for something you can just pay some people minimum wage to do so you're not actually making labor cost savings or whatever in most cases

# ? May 23, 2023 19:58

Engorged Pedipalps: Apr 21, 2023

Spaced God posted:

Also LLMs have an insane spool up price and require tons of hardware to run and maintain for something you can just pay some people minimum wage to do so you're not actually making labor cost savings or whatever in most cases

The costs of computer infrastructure are obfuscated so badly for anyone outside of computer infrastructure that this seems to get lost on people entirely

By the time the models are strong enough to be used commercially they will be outrageously expensive as a service and even more expensive to run in house for anyone but the largest corporations

This is the same half-way thinking that people did with the cloud. People aren't thinking about energy or data transport costs, they're just looking at the product and the hype. Knowing that chatgpt, etc's public facing model is running on the compute resources of a small nation, I'm very skeptical at this scaling down or out

Engorged Pedipalps has issued a correction as of 20:12 on May 23, 2023

# ? May 23, 2023 20:09

triple sulk: Sep 17, 2014

Spaced God posted:

Also LLMs have an insane spool up price and require tons of hardware to run and maintain for something you can just pay some people minimum wage to do so you're not actually making labor cost savings or whatever in most cases

it's all completely subsidized and eventually the companies will realize the returns aren't worth it. i think the outcome just depends on who realizes this first. if it's the investing companies e.g. microsoft realizing it, they'll start charging obscene amounts to make up for it. if it's the consuming companies realizing it, they'll probably just stop.

i presume the latter will happen first since they have less money to gently caress around with

# ? May 23, 2023 20:13

Jel Shaker: Apr 19, 2003

doesn�t each query cost 3 - 30 cents in energy and computer costs? which doesn�t sound much but when you have a grandma just mashing buttons to ask why her haemorrhoids hurt it�s going to add up pretty quickly

# ? May 23, 2023 20:19

Engorged Pedipalps: Apr 21, 2023

triple sulk posted:

it's all completely subsidized and eventually the companies will realize the returns aren't worth it. i think the outcome just depends on who realizes this first. if it's the investing companies e.g. microsoft realizing it, they'll start charging obscene amounts to make up for it. if it's the consuming companies realizing it, they'll probably just stop.

i presume the latter will happen first since they have less money to gently caress around with

Microsoft / Google etc have to know this isn't a sustainable model already, at this point they are just making sure they have as many people standing on the rug as possible before they pull it

# ? May 23, 2023 20:21

triple sulk: Sep 17, 2014

Engorged Pedipalps posted:

Microsoft / Google etc have to know this isn't a sustainable model already, at this point they are just making sure they have as many people standing on the rug as possible before they pull it

microsoft leadership is insanely shortsighted so i argue the accuracy of this assertion

# ? May 23, 2023 20:22

Delta-Wye: Sep 29, 2005

skooma512 posted:

Geopolitical concerns and the failure of the business plot are why the US went for the allies. France and the UK were in our bloc and there was no getting around that, and there were Nazi sympathizers here. The US happily took up the mantle of anticommunism from Nazi German though.

Now that the Business Plot 2 and neo confederates firmly entrenched themselves after the civil rights era and neoliberalism, the US is blooming into the fascist state it always knew it could be.

did the business plot fail? im no longer sure

# ? May 23, 2023 20:23

Nothus: Feb 22, 2001; Buglord

Turtle Sandbox posted:

"The Market" is simply our God.

There is no God but Number, and Market is it's messenger.

# ? May 23, 2023 20:23

RadiRoot: Feb 3, 2007

Nothus posted:

https://twitter.com/paulkrugman/status/1661000816923123712?s=20

lmao more like Paul Kredulous

i dont get the big deal. just accept the compromise the house gop wants and then undo it when dems have power again. easy

# ? May 23, 2023 20:28

Hubbert: Mar 25, 2007; At a time of universal deceit, telling the truth is a revolutionary act.

Nothus posted:

There is no God but Number, and Market is it's messenger.

Number's in its heaven— / All's right with the world!

# ? May 23, 2023 20:30

Antonymous: Apr 4, 2009

gradenko_2000 posted:

I do want to clarify here that "food shortages" tends to be a somewhat misleading characterization of what it was like behind the Iron Curtain. What happened was that you weren't assured of any given/specific foodstuff that you wanted, on any given day, but there was always something to eat/to purchase. Just that you couldn't always have the particular cut of beef that you wanted, on the day that you decided you wanted it.

which, to me, sounds completely reasonable

zizek said this is even preferable basically because its stimulating. like you go one day and there's no eggs and a few days later you go and eggs are back and you are then conditioned to go thank gently caress there's eggs. and you read in the news "egg farmers working hard to make up for shortage" and then next week its prime rib or something.

# ? May 23, 2023 20:33

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# ? Jun 6, 2024 19:15

PoundSand: Jul 30, 2021; Also proficient with kites

err posted:

https://www.lendingtree.com/personal/bnpl-ends-meet-survey/

Paypal has had a no interest on stuff over 100 bucks for I wanna say 6 months for years now and before I had a CC with a real good point system I would often use that cause no interest for half a year even if you could afford something now is just free money, leave it in a HYS or w/e and pay it when due. When they implemented one of the more traditional BNPL schemes of like 4 payments over 4 weeks it just didn't really make sense to me, like you can already use a credit card and not pay interest for a month what niche exactly does this serve.

Turns out it was just an extra line of credit/a trap for people already tapped out.

# ? May 23, 2023 20:35

The Something Awful Forums > Discussion > C-SPAM > [Doomsday Economics] your economic system is a piece of shit

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