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Hadlock posted:So hypothetically if you were buying a house this month, would you choose to rate lock today at 6.25% or wait and see what the fed does tomorrow there is absolutely no chance the fed will cut rates tomorrow. at most it’s a pause followed by a hike in may and I think there’s still a strong chance of another 25 point hike tomorrow markets are dovish but they’ve been dovish for at least the last four fomc meetings and they’ve been wrong every time
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Mar 22, 2023 01:28
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that’s exactly what he’s been saying for half a year
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Mar 23, 2023 01:14
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man there are like three whole forums just for doomposting e: less shitposty: Warmachine posted:I wouldn't have even increased rates right now, let alone said my true target is 6% if that was the case. Even if half the economy called your bluff, the wheels just fell off the other half of the car as everyone starts scrambling to hedge themselves against your intended rate hikes. They announced almost identical dot plots in november, december, february, and now march, and have insisted every time that they’re going to get inflation down to 2%, and they lose all credibility if they change their minds now. If the markets wanted to bet dovish in spite of all that, well, the dual mandate isn’t about asset price stability. This is, in all likelihood, a downgrade from what they were going to do two weeks ago which was a half point hike, and at this point I think the only thing that can seriously slow them down is if unemployment suddenly ticks up to like 4.5%, and it’s shown absolutely no sign it’s about to hypnophant fucked around with this message at 01:47 on Mar 23, 2023 |
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Mar 23, 2023 01:35
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Warmachine posted:It may not be the job of the Fed to shepherd the banks, but I don't think it's wise to blindly chase inflation targets without consideration for the side effects that is going to have when we're seeing actual bank runs kill off banks. Short answer: it sort of is, in the sense that the first job of any central bank, before inflation targeting was invented, was preventing bank panics. If a bank is fundamentally solvent, the Fed has a legitimate role to play in keeping them functional in the face of market instability. That’s why they’re not “blindly” chasing inflation targets. They’re collecting data and they have an army of PhD economists to analyze it, as well as conduct high-level meetings with the treasury secretary and top banking executives, to investigate the questions of “what will the side effects be” “how exposed is the banking system as a whole to contagion” etc. SVB and FRC are not systemically important banks and a bank run at one, or even a handful of banks is not a systemic problem. It’s frankly healthy, provided those banks can be unwound and their depositors made reasonably whole. Shuttering banks that gently caress up risk management is a good reminder that risk management is an important job of bankers. If you watched the post-FOMC presser today - it’s not riveting, but it was only ~45 minutes - this was the first question Powell addressed. I think there’s plenty to criticize the Fed and Treasury on over the past couple months, and especially the last two weeks, but hanging lovely bankers out to dry ain’t it.
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Mar 23, 2023 02:24
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I agree with a lot of what you say, but I don’t think it’s as meaningful as you suggest whether the problem is “too much money” or “too few goods.” Those aren’t really different problems, they’re just different causes of the same problem, which we could describe as the money/goods ratio being off (or really, changing faster than we’d like.) That’s the nail, that’s exactly what the Fed is supposed to be taking care of with their hammer. The corollary to this is that even if the problem is that the money supply expanded while the goods supply stayed the same, the hammer still gets swung, and still lands in pretty much the same face. The Volcker disinflation is kind of the exemplar of what the modern tools of monetary policy are meant to do, and it still caused a bunch of unemployment.
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Mar 23, 2023 04:04
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any congressperson with the juice to affect the fed has way more direct ways to get the policy they want implemented like passing a law
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Mar 23, 2023 05:38
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Bio-Hazard posted:Those dead COVID workers were fat, old and disabled. They were not productive workers. I’m not going to address the first claim because it sucks but there’s an obvious, glaring logical inconsistency in the second
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Mar 23, 2023 17:03
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2010 was like the peak of the decline in lfpr though, and it’s tough to argue that was driven by boomer retirement when the median boomer was like <60
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Mar 23, 2023 17:30
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Leperflesh posted:Fun food for thought: the majority of american money is not printed at all. It exists only electronically. the creation of reserve deposits has exactly the same impact on the money supply that printing cash does. they’re both m0 quote:such as when conservative outlets were insisting the Biden admin had "printed" 8 trillion dollars (or whatever) and this was the cause of inflation. this is disinformation because the trump admin did that, not because they got monetary policy wrong
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Apr 19, 2023 23:33
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There are a lot of cheerleaders, on both sides of the aisle, inside and outside of the US, who have been desperate to see the dollar fall, and will jump on any small sign that the end is beginning. It doesn’t necessarily mean much In particular what you usually don’t see in these articles is a discussion of prices. Russia took a huge haircut when they started accepting yuan and rupees for oil. China is presumably offering better prices for stuff bought in yuan (or they’re overpaying to buy Brazilian stuff in yuan, so that Brazil has more yuan than it wants, and can’t do anything else with.) It’s hardly surprising that Bangladesh, a very poor country surrounded by India on three sides, would have an easier time obtaining rupees than dollars. None of these things can displace the dollar China and Russia are invested in the narrative of western decline and are willing to accept unfavorable terms of trade to push that narrative. Goldbugs and goldbug-adjacent types are invested in the narrative that the fed/treasury/fiscal policy/foreign policy/etc are loving up and want to push media stories to further that narrative. These are all pretty marginal factors, considered against global eurodollar trade as a whole.
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Apr 22, 2023 16:35
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a reserve currency needs to have three things: liquidity, liquidity, liquidity. euros are only liquid because of the ecb’s swap lines with the fed, so they can’t be a replacement reserve currency, though they can help supplement dollar liquidity as long as the us remains on top. the renminbi is closed and the dollarydoo, like sterling, yen, and won, is just too small of a market to serve as a global reserve frankly i can see why a lot of foreign countries think they want the usd to be replaced, but wishing won’t make it so. a basket currency managed by the imf is gonna run into the problems that the imf doesn’t want to do it and the us doesn’t want the imf to do it i’m also curious what connection sa-anon identifies between the security council and a reserve currency, and in particular, why changes in the imf-managed sdr would have anything to do with permanent security council seats
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Apr 26, 2023 11:02
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one of the things that’s gotta be unwound before the dollar gets displaced is that a lot of foreign private companies are now issuing dollar-denominated debt. These are entities that are never going to be able to hold XDR or whatever “basket currency” instruments get hypothetically introduced, so as long as those positions are still being held, there will still be foreign demand for dollars requiring that foreign countries hold dollars in reserve.
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Apr 26, 2023 18:08
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They announced a huge fraction of their deposits had been withdrawn, which crashed their stock price, which made maintaining their capital requirements untenable. That’s what’s causing them to go into receivership - afaik there haven’t been problems with withdrawals yet, but they’ve likely run out of cash on hand, even with the fed’s new liquidity measures.
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Apr 29, 2023 13:17
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Yes. That’s what killed SVB; the bank run started after they tried to issue a large amount of stock.
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Apr 29, 2023 14:14
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Hadlock posted:Are we going to end up with a situation where the Fed opens up a new bank backed by the Fed, they then buy all mortgages under 4.5%, let it go under or simply liquidate it and the mortgages they're holding are then sold back to the banking sector at fire sale rates so the debt is profitable again? QE by way of giving low interest rate mortgages a haircut in valuation and letting the Fed swallow the loss and tossing it on the bonfire of Fed balance sheet? My take on QE is that you should just think about it as a way to cut rates when rates are already at zero. For various reasons - good reasons IMO - the Fed, unlike ECB and BoJ, has been unwilling to implement negative interest rates to continue loose monetary policy below what’s now called the effective lower bound. QE = a rate cut. QT = a rate hike. Right now the Fed is tightening so we won’t see rate cuts in any form until at least the end of the year - see this timely twitter thread https://threadreaderapp.com/thread/1652776776370733057.html for an argument which puts it better than I can. The Fed ultimately does need to prevent bank runs, but they will turn to bank liquidity tools like the discount window or new Bank Term Funding Program rather than monetary policy tools to do so. The difference here is scale - QE pumped trillions of dollars into securities in order to shift the yield curve across the entire economy, while BTFP may see billions or even tens of billions of dollars of uptake, but not enough to shift macro conditions. Also they don’t need to save every bank, they just need to ensure systemic stability. Letting a couple outliers twist in the wind does not harm their credibility.
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May 1, 2023 15:24
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DNK posted:a perfect world, a third bank would fail and they wouldn’t bail unsecured deposits we’re all in favor of techbros and venture capitalists getting their comeuppance, but you have to see that this significantly raises the risks of a cascade of failures as unsecured money flees to safety. Monetary policy is an hammer, not a scalpel, and if you want to use it to punish the deserving you can’t avoid crushing many of the undeserving as well
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May 1, 2023 17:12
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pmchem posted:FRC equity shares and corporate bonds are getting wiped out. Those were the gamblers. Hard to call random people living near a branch who used it to deposit paychecks or save for a house “gamblers.”. I’d go a little tougher on any business or VC bank deposits over the limit held there, they should know better. randos aren’t depositing more than 250k into their checking accounts GhostofJohnMuir posted:but the fed doesn't want banks to fully hedge interest rate risk, as shown by their coolness towards narrow bank applications. even a fairly aggressive narrow banking proposal isn’t going to let you put a quarter million+ into a payment account, so it won’t protect anyone who isn’t already going to be made whole by the FDIC
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May 2, 2023 00:37
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e: less snarky post when i can type it up
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May 2, 2023 01:11
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Cyrano4747 posted:Alternatively you make all banks go through routine and actually thorough audits and stress tests to ensure their health, and anyone given the "too big to fail" label gets a whole set of extra regulations that basically turn it into a utility. this is exactly what a SIFI/GSIB is. The Dodd-Frank stress tests that got unpassed for mid-tier banks like SVB are still in place for the eight largest US banks. Also JPMC isn’t considered the safest bank right now because people expect the government to bail it out, it’s because it’s sitting on enough cash to bail out the government.
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May 3, 2023 14:04
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Cyrano4747 posted:dodd-frank should never have been repealed for mid-tier stuff. plainly. but to be precise, large parts of dodd-frank remain in place even for small banks; it’s only the asset requirements to be considered “too big to fail” that got raised. I’ll also point out there’s some debate whether having these stress tests in place would have saved SVB, since they allegedly don’t consider interest rate risk as part of the stress testing regime. I don’t know enough about the stress tests to comment about that. I do know, from watching hours of senate testimony for a class on the Fed this semester, that the SF Fed had found SVB to be deficient on a number of risk measures and had given them notice they needed to clean up their poo poo, but they hadn’t reached the “actual consequences” phase yet and anyway it’s not obvious what SVB could have done differently once interest rates started climbing and a big chunk of their asset book was suddenly underwater.
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May 3, 2023 14:39
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Doctor Malaver posted:Thanks pseudanonymous, Jenkl, and Cyrano, much appreciated. Let me see if I got it right. ehhhhh. Try this: A: I’m First Bank of Springfield. I’m a regional bank in a mid-size american town, and I used to operate by taking deposits from local residents and businesses and loaning that money back out as business loans and mortgages, It’s A Wonderful Life-style. That worked great when I could pay 3% on deposits and earn 6% on my loans, but now I’m only making 1.25% on loans, so even though I’m paying 0.12% on deposits I’m getting squeezed. Fortunately I can sell the loans to the Government Sponsored Enterprises, Fannie Mae/Freddie Mac/Ginnie something, so nowadays what I actually do is approve as many loans as I think I can sell, book the origination fees, and turn around and offload those to the GSEs. I don’t hold the loans so I don’t care too much about the risks so long as I can get them off my books. B: I’m a GSE. I was invented during the great depression to subsidize home-buying and i’ve been extremely successful at that. In the 60’s I was privatized; in theory i’m still guaranteed by the government, and securities I issue are treated almost identical to government bonds, but we’ve never actually tested that. I exist to make cash available to banks to loan to american home-buyers, which I do by buying mortgages off their books. In the past I would only buy loans from buyers with good credit history in non-distressed neighborhoods - i.e., suburban white folks - but over time, partly for political reasons and partly because it’s an untapped market, I’ve also started buying mortgages of “less traditionally creditworthy” buyers. The politicians are convinced I can do this without taking on any additional risk. C: I’m Morgan Stanley. I’m an investment bank representing big piles of cash - insurance companies, pension funds, the very very wealthy. The GSEs have come to me - they’ve got these so-called “sub-prime” mortgages piling up on their books, and they’re asking me to buy some. I’m willing to do it, but I don’t really know how to price them - they’re definitely riskier than prime mortgages which I’ve been happily buying all along, but how much? No one’s bought these things before. I’ll ask the ratings agencies. D: I’m Moody’s. A group of investment banks and GSEs have come to me asking me to rate these CDOs they’ve come up with for subprime mortgages. I’ll have to survey a ton of regional banks to try to understand the subprime mortgage market. I’ll get as much data on historical trends as I can and run simulations to try to understand how the value of this new product will evolve. I’ll look at default rates, home prices, unemployment… Notably, I can’t look at scenarios that have never happened before, like what happens if there is suddenly an order of magnitude more money going out into subprime loans. Will there be new, even riskier buyers? will they have the same characteristics as those in the historical data? I’m just going to assume they will. E: I’m Lehman Brothers, the most batshit highly-leveraged insane fund on wall street. All day long I look for the asset I think will give me the highest possible return for the risk, then as soon as I’ve bought it I turn around and lend it to the Fed for more money to buy more high-yield assets. The Fed will only repo me money for good collateral, but fortunately the bigger banks have invented a whole new class of investment-grade securities so there’s a lot more “good collateral" floating around out there. I’m technically not a bank so I don’t even have to worry about minimum capital ratios, allowing me to leverage myself into the stratosphere and make insane profits for my hypnophant fucked around with this message at 00:44 on Jul 10, 2023 |
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Jul 10, 2023 00:29
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pseudanonymous posted:I strongly disagree that they can't examine the possibility of scenarios that have never happened before. I'm not saying they do, but they could. OK, how? The underlying problem - or one of them - was that the correlation between different regional markets had increased. This is a measured parameter which they incorporate into their models; historically it’s been x, and now it’s >x. How much greater? you need a number to plug into the formula. More importantly you need evidence for your new number, and the evidence doesn’t exist yet. You’re not supposed to just go around tweaking numbers because they don’t “feel” right, and doing so undermines your own credibility, plus as you point out there’s no incentive to do so; there’s the profit motive (your customers want to be able to sell these securities) but also a social incentive (rating these as investment-grade will ultimately mean making more capital available to non-traditionally-creditworthy borrowers, allowing people previously excluded from the housing market - i.e, subprime - to buy homes. If you think financial institutions don’t at least want to give the image of caring about this, I invite you to try to find the largest american bank that doesn’t advertise its DEI/ESG initiative.) It’s fine to say the ratings agencies didn’t do a good job by the arbitrary standard of preventing a crisis which it wasn’t their job to prevent. It’s harder to say what they should have done differently to prevent that crisis, given the incentives they faced and without the benefit of hindsight.
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Jul 10, 2023 16:59
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Pittsburgh Fentanyl Cloud posted:"Millennials are in their peak childbearing years" is a result of our hosed up housing situation, not the cause of it. The previous poster is confused. "geriatric pregnancy" technically starts at 35 because that's when statistically significant elevated risk starts to show up for fetal abnormalities or other health complications, but it's a difference of percentage points until you get into like your mid-to-late forties. It's not like there's a hard cliff at 35, and even if there were, half of millennials are still younger than 35. Also, to be blunt, I think the language you've used is pretty hosed up and devalues women. If you're a medical professional, you should understand that lay people may have a different understanding of medical terms and be sensitive to how you use them outside the medical community. If you aren't a medical professional then you need to understand that medical terms may not mean what you think they mean, and probably avoid using them altogether if you think they may be perceived as insensitive. You should be especially sensitive right after you've tossed off an extremely reductionist slogan like "peak child-bearing age is 22."
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Jul 27, 2023 16:22
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harperdc posted:I think I heard in business school that there are four types of economies: bear markets, bull markets, Japan, and Argentina. "developed, underdeveloped, Japan, and Argentina" Argentina has been a basket case for a long time, and at this point it's basically a stereotype of sovereign default. There are a number of reasons for this; it's a large productive agricultural commodity exporter, which means it can make a lot of money in good times, but is terribly sensitive to both price shocks and, as bob dobbs points out, weather. Over the decades this has contributed to political instability and a cycle of overreliance on foreign investment, followed by onerous debt payments, restructuring, another round of boom and bust, and eventually, default, which Argentina went through in 2001, 2014, and 2020. The current bout of inflation is probably magnified by the expectation that Argentina will again be unable to pay its bills.
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Aug 9, 2023 02:32
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bob dobbs is dead posted:spain portugal and greece show that sovereign defaults are a get one get 7 sorta deal I knew Argentina had defaulted more than once just this century but some Wikipedia digging informed me it’s actually defaulted nine times since independence from Spain
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Aug 9, 2023 13:31
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the dollar's days are numbered. all china and russia have to do is allow free movement of capital, and the whole rotten edifice will crumble into dust
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Aug 13, 2023 19:47
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street doc posted:In previous rate spikes, you didn’t have private equity around to catch the knife when housing prices fell. That’s changed, meaning rates have to stay at 8% for a while before sentiment begins to turn. Housing should be down in value, but with enough “long-term” thinking investors, we won’t see the expected drop. There hasn’t been a rate spike since the 80s, and PE is not locking in SFHs when the Fed says we’re almost a quarter point away from the peak. The main reason housing isn’t down in value is because most potential sellers can’t afford to move.
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Aug 29, 2023 21:51
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Walh Hara posted:I'm a bit confused by some statistics I found. The total amounts of money held in saving accounts in the Unitesd States is supposedly about 800 billion, whereas in Belgium this same statistic is 330 billion dollar. So despite the USA having a way higher average wealth per capita (almost double), the average Belgium has 10 times more money on their saving accounts than the average American. Is there an easy explanation for that or am I reading my sources* wrong? I don’t remember where I saw this statistic but the European financial system is much more reliant on just regular bank savings accounts. Americans tend to have better access to financial products like 401ks, even at lower income levels, than their European counterparts, and so keep less money in savings accounts at banks.
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Aug 30, 2023 03:55
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KYOON GRIFFEY JR posted:But I question whether it's going to move policy in a meaningful way in each of the member countries. The more or less explicit position of at least Russia, China, and India - and many of the other prominent countries interested in BRICS+, and probably also many of the Western commentators who are getting excited about BRICS - is that international institutions should provide a forum for commercial/financial ties only, and have no business trying to influence member states' policies on economic development, let alone human rights, political freedom, transparency, etc. It's more plausible that whatever BRICS institutions arise will deliberately avoid any open structural influence on policy as it's exerted by the UNHRC, IMF, and other international institutions. Cyrano4747 posted:what I'm going to just hand-wave as the Bretton Woods economic system. Much Bretton Woods is largely defined by the US economy and how people interact with it I think better terms for this in the modern era are just "the UN" or "the system of global trade". The Bretton Woods system is entirely dead and the institutions it spawned are part of the UN now.
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Sep 5, 2023 17:42
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https://arstechnica.com/gadgets/2023/09/new-huawei-soc-features-processor-cores-designed-in-house/quote:Analysis of the main chip inside the Mate 60 Pro smartphone, which launched at the end of last month and immediately sold out, reveals that Huawei has joined the elite group of Big Tech companies capable of designing their own semiconductors. I've seen some sources imply this new chip shows Joe Biden's Sanctions Aren't Working, but to me it seems like this is the intended effect: Chinese companies have to switch to domestic chip production, at a lower level of performance and presumably higher economic cost. I don't think anyone expected the sanctions would totally prevent any new domestic chip development in China. Anyone have a different take? How big of a deal is this?
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Sep 20, 2023 15:11
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mrmcd posted:Seems to be basically "no gas, nor breaks, until we figure out what direction the economy wants to go in." The FOMC statement has almost nothing in it - I interpret the change from "economic activity ... expanding at a moderate pace" to "... solid pace" as meaningless - but the summary of economic projections is kind of interesting, if you want to try reading some tea leaves. The big change is the doubling of the 2023 GDP growth rate median projection, from 1.0 in June to 2.1 today. Obviously on some level that's just the committee accepting that the slowdown they've been waiting for isn't showing up, but one does get the sense that they're having to adjust priors. That also explains the downward adjustment of the 2024 and 2025 unemployment predictions. All this is happening despite no real change in the glide path for core PCE inflation - but the committee now expects to maintain rates above 4% until the end of 2025. Not that that projection means much, given the variance in the dot plot, but I agree that no one should expect a drop in rates any time soon.
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Sep 21, 2023 18:58
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The junk collector posted:It's worth keeping in mind to that rates weren't lower prior to 1970. That's just when the fed started tracking a published rate. That 10 year stretch of sub 5% is a major historical anomaly that seems to have broken a lot of people's brains finance wise. If we hit it again it will probably be because of a major financial crisis. that's average rates, though, and a buyer with excellent credit could plausibly get a mortgage only a point above the FFR. I highly doubt anyone alive today is ever going to get a mortgage below 2% like the most credit-worthy buyers did post-GFC, but wouldn't be surprised if some people can get 4% in a few years. The problem with trying to point to pre-1970s rates is that those are also a historical anomaly - you have the post-war era where America had massive industrial overcapacity, the rest of the world was experiencing either the Trente Glorieuses or early post-colonialism, etc, and the impact of all that on rates is hard to parse. Historical data doesn't go back far enough to know what to expect from the future, given that future conditions are not going to be like the twentieth century. My guess is that we're still in the global savings glut that drove rates to zero during the 2010s, and will be for at least the next decade or two as the rich countries continue to age. I don't expect them to get down to the zero lower bound again but the Fed's long-term projection of 2.5-3.5 seems as good a guess as any.
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Oct 1, 2023 15:12
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even japan has seen some signs of inflation over the last year or two so I wouldn't even bet on that. but the BoJ has been a real thought leader in creative solutions to monetary policy constraints, so if they want money to be easy they'll find a way
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Oct 1, 2023 19:00
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pmchem posted:Regarding US debt and yields, I’m curious to hear people’s takes on Dalio’s debt crisis scenario, as discussed by Ed Yardeni here: I've heard similar things from other sources recently as well, and I think the whole scenario is a morality play from spending hawks who are still clinging to austerity economics. A couple points in no particular order: As Leperflesh points out, the fiscal deficit isn't actually very hard to solve - except politically. Just raise taxes. We can easily afford current spending levels, and even pay for desperately needed transition infrastructure and other programs, by raising the top marginal rate and squeezing capital gains harder. This will increase revenues substantially and will not cause a recession, nor will it deter long-term investment. There's no basis in economics to believe the US is anywhere close to a tax level that will have those effects. Next, the "debt crisis scenario." The example that deficit hawks tend to point to is Argentina or Venezuela. It is completely absurd to think that the US will ever look like Argentina. The very simple reasons I think this are: 1. Like Argentina, the US borrows in dollars. Unlike Argentina, the US can print dollars, and collects dollars as tax revenue. The US doesn't need to get dollars by exporting goods and services, and will therefore never have a shortage of dollars to repay its debts; 2. The US economy is very isolated relative to Argentina (and every other developed country); 3. Most US debt is owed to US citizens, unlike Argentina where it's mostly owed to foreigners. 2 and 3 mean that there's no real way for debt repayment to impact prices and cause a cost of living crisis like in Argentina. Most of the things we buy are priced in dollars, so there's no exchange rate risk to worry about, and debt repayments mostly end up in American hands getting spent on American goods. Then we have the technical details about how yields going up plus the strong dollar is bad, actually, and will ultimately lead to the aforementioned debt crisis through some rube goldbergian mechanism, which if you dig down often involves BRICS somehow. My alternative hypothesis is that the ten-year yield is up because investors finally believe the fed will keep rates higher for longer - i.e., the thing the fed's been saying since October - meaning there's less pressure to lock in those high rates now. This is where I think these guys are really going astray. They thought the Fed's action would cause a recession that would force the Fed to lower rates again. That recession hasn't arrived and they're starting to lose credibility, so now they're pivoting to an alternative explanation of why there's still going to be a recession and it's still going to be the Fed's fault and rates are still going to have to go back down. It stinks of motivated reasoning to me - all the evidence right now is pointing to a soft landing, unbelievable though that is to Fed-haters, so they need to explain away the evidence or find some reason why it confirms what they've been saying all along, actually. Discendo Vox posted:My understanding is that the downgrade was over concern that the Republicans would cause a debt crisis, not the debt or deficit size itself. Completely accurate. It would be better if we could avoid a crisis but if the alt-right do manage to force one, it'll be resolved very quickly when everyone agrees to hang Matt Gaetz in the street. It has nothing to do with the fundamental solvency of the US government, or its capability (not political will) to raise tax revenue. hypnophant fucked around with this message at 20:53 on Oct 6, 2023 |
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Oct 6, 2023 20:24
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zero reason to believe any of that unless you also think bond vigilantes are about to blow up US federal securities as soon as debt-to-GDP ratio passes
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Oct 6, 2023 21:30
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Subvisual Haze posted:Look back by virtually any metric normalized as percentage of GDP and it's looking bleak. this amounts to another bad argument for austerity policy. sensible economists ought to regard austerity as completely debunked by now; recent exemplars include the UK under Truss and Germany, currently enjoying being the subject of another round of "sick man of Europe" discussions. IMO the idea that government spending crowds out investment is completely suspect, but that's a theory debate: the evidence is that cutting your way to growth never works, but there's no evidence in economic data for any "tipping point" at which either a stock or flow variable (debt-to-GDP or fiscal deficit, respectively) becomes "unsustainable" - an ambiguous concept in itself. Subvisual Haze posted:ibonds and TIPS because their yields rise with inflation you think the federal government is going to become insolvent, so you want to lend more money to... the federal government?
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Oct 6, 2023 22:22
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I don't think we're going to raise income taxes by 8% across the board, but I also subscribe to the MMT idea that debt isn't a meaningful fiscal constraint so it doesn't matter. However, I do think the influence of tax protestors on fiscal policy is past its peak. We'll find out in another month and a half but I don't see a way for the eight dumbest republican congresspersons to force through massive, and massively unpopular, cuts. They might be able to force a voluntary default, and I expect that will be the end of any meaningful career they have in congress.
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Oct 6, 2023 23:05
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Discendo Vox posted:I'm used to "tax protestors" referring to sovcits, but I assume that's not what you mean here? ehh broadly I'm talking about Grover Norquist, Americans for Tax Reform, and their ideological allies which includes a pretty broad swath. Sovcits are an offshoot but they don't have any influence of their own.
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Oct 7, 2023 00:15
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hobbez posted:I don’t know what it means when the US can’t service its debt obligations but I’m not particularly eager to find out either. Are there solutions? Sure. Will they be implemented? That is the hard part and has yet to be seen I fully trust in america to do the right thing, after it’s tried everything else
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Oct 7, 2023 04:48
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| # ¿ May 22, 2024 10:04 |
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also funding the social safety net is two thirds of what the federal government does. That’s very much where most of the money goes.
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Oct 7, 2023 04:50
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