US cannot default on US debt. It is not possible. World reserve=US does not work the same way. Most politicians know that the debt does not matter, but will use it as a rhetorical device. Does the treasury yield rate matter to the US gov, like the people at the top making the decisions, in any critical sense? I kind of feel like they can control it through policy or the fed, since $USD is literally what the world runs on. So even tho treasury repayments on huge debt amounts now comprise a considerable slice of the budget, and the story is that US cannot afford to support its citizenry, cos they are in debt, I suspect that they could exert far more influence over this if they chose to.
The yield rate does mater in that it's correlated to inflation. If the yield goes up, investors sell bonds, and prices go up.
Modern Monetary Theory says that's OK. You stop the pretense of borrowing, then print as much money as you want. You then control inflation by taxation, and then simply burning the dollars you collect.
But the switch from one to the other would be unpleasant, since a lot of bond holders are depending on their bonds being worth more than the purchase price after inflation.
Couldn't the treasury very literally decide not to pay bond coupon or not return capital? Isn't that why the US treasury has long been considered the safest of investments?
Or is this some terminology lawyering that default is a legal term that doesn't apply to a sovereign?
Am also casually looking at FRED. RE 2014 decline - do you know why this was? I speculate something to do with the initial invasion of Ukraine / China cycling out of treasuries possibly to buy Russian war bonds or oil. I am purely speculating.
We don't hear anything about it because the Republicans are in charge. If a Democrat was in the White House right now you wouldn't be able to shut Fox News and it's ilk up about how the national debt is a harbinger of doom for the entire country.
It’s not just US debt that’s a problem. It’s also state level and local level. Every part of our government is spending irresponsibly. A lot of the debt is hidden too. A pension with more future liabilities than it can pay for isn’t going to show up as deficit on this year’s budget. A state putting out bonds may count interest payments in the budget numbers that show up in press conferences, but the actual total debt isn’t talked about much.
I’m not sure why anyone expects differently. Politicians corruptly waste money to helping themselves, their careers, their party, and their causes. It’s other people’s money that they are spending. And most of them never had substantial experience in private industry to learn the skills it takes to manage billions of dollars of budget. Governments are far, far more wasteful and inefficient than anyone realizes.
> It’s not just US debt that’s a problem. It’s also state level and local level.
It’s also corporate level. Worse than government actually, because the government deficit is caused by several trillion-level tax cuts that were financed by government debt. Corporate debt comes on top of that.
> A lot of the debt is hidden too.
Accounting is even worse in corpo-land.
> Politicians corruptly waste money to helping themselves,
Again, Wall Street is worse, politicians don't become billionaires - billionaires buy their way into politics.
> Governments are far, far more wasteful and inefficient than anyone realizes.
I very often think about how much money Americans spend just on basic infrastructure needs compared to people who live in places built at a more sensible scale.
If I got a job in Arlington Texas right now, I’d first need to load myself up with a car payment and spend 4-5 figures per year just for basic needs like groceries and work, even if I lived within walking distance of that job.
Arlington, with a population of over 350,000, has no scheduled route public transportation service.
American towns and cities never seem to think about things like like “how many feet of sewer line/streets/utility lines and miles of road do we need for each resident?” or “how much population/economic activity per acre do we need to break even on services?”
Did you ever consider the idea that not everyone wants to live in the typical "urban" environment?
Not having public transportation or high-density housing nearby is a feature and a desirable property.
> I’d first need to load myself up with a car payment and spend 4-5 figures per year
Also a feature: if you can't afford this, perhaps that isn't the community for you?
This is a fairly typical agenda: "I want to spend your money turning your city into something you don't want it to be so some theoretical utopia can be actualized."
No matter how much crying and extolling of virtues you do: nothing is going to make me ride the bus. No matter how many "road diets" you impose, no matter how many lanes you kill by dedicating them to buses: I'm not going to ride your bus system. I'll just take my tax dollars (which far exceed that of typical bus ridership) elsewhere.
I ride the subway everywhere in NYC, but not every city needs to become NYC.
Part of what I think they were getting at is that suburban living is usually a long term burden on state budgets because the lower density means that maintenance costs aren't fully covered by tax revenue. If people want to live in these communities they should be expected to cover the costs, but since the necessary tax increases aren't popular they never get passed and the budget becomes unbalanced
I completely understand your reaction, and it's a very typical one when I talk about this subject. I hope you're willing to engage in a productive conversation and maybe you'll come away with at least a little new perspective.
I am not at all advocating for stifling urban density. I never suggested that nor ever talked about building subways or skyscrapers.
The organization I linked to is called "Strong Towns" not "Strong Cities" and that is on purpose.
> Also a feature: if you can't afford this, perhaps that isn't the community for you?
Let's reframe this: If I'm a business owner, I can pay an American breadwinner $100,000 and they'll spend $10,000 on transportation per year for their family. Or, I can hire someone who lives in a place where they don't have to spend that much and I can pay them $95,000 a year. Maybe that other family only owns one car per family instead of two, I'm not even saying that they never drive. They just don't have to use a car to reach 100% of the destinations they want to reach in their life (grocery store, school, work, playground, etc).
This is what I'm really getting at here: Americans collectively blowing all this money on longer roads and sewer lines and a bunch of half-empty parking lots that don't generate tax income and economic activity makes America less competitive on the global stage. It’s a silent drag on the economy.
This is before we even dive into the rabbit hole of the statement you just made: that you implicitly believe that this self-reliant car-dependent transportation system makes it more difficult to be poor. What happens if my car breaks down before my first day at work at an entry level hourly job? I'm going to be fired, and then I will have no job to pay for fixing my car.
You don't even have to be pro-urbanism or prefer to walk to places to understand that argument.
> This is a fairly typical agenda: "I want to spend your money turning your city into something you don't want it to be so some theoretical utopia can be actualized."
1. What do you want your city to be? Can you describe it? What environments in your city/town do you enjoy spending time in? Which ones do you find uncomfortable to be in? What's it like to stand in those places, outside of your vehicle?
2. Is the utopia theoretical? Try visiting the downtown of any small railroad town in the US and observe the scale of it. How many millions of Americans per year travel internationally to experience walkable environments? Small towns that are comfortable to traverse without driving do exist: https://www.youtube.com/watch?v=ztpcWUqVpIg
> No matter how much crying
I do not recall crying
> nothing is going to make me ride the bus
> I ride the subway everywhere in NYC
Now you're sending mixed signals, I guess. My hypothesis is that you don't actually know what it's like to ride the bus, and the idea scares you. I hear you. You've probably never been on one that is frequent or pleasant, probably just your typical infrequent broken-down slow bus that is underfunded in America, the kind of bus where you have to be extremely desperate to resort to using it. So you get on the bus and that's the demographic, and it makes you uncomfortable.
Have you ever been to Disney World? Did you ride the bus there? Why didn't you just drive up to the gate?
Have you ever ridden a bus from the airport parking to the airport? Why did you do that? Why not just drive up to the airport?
> no matter how many lanes you kill by dedicating them to buses
Even if you prefer to drive, you should actually want what I want, because it alleviates traffic. If your goal is to get more people to drive, you will have more traffic.
> I'll just take my tax dollars (which far exceed that of typical bus ridership) elsewhere.
The place you are taking your tax dollar is into sewer line reconstruction. it really isn't even all that much about transportation itself, it's about property tax efficiency.
100% debt-to-GDP sounds like some fundamental threshold when it's actually just a Schelling point. It's 1.00 GDP-years of debt, which is a number with an arbitrary time unit in it (why not GDP-month or GDP-decade?)
But yes you don't hear anyone about this because politicians waste no time on things they know they can't fix. DOGE was a fucking embarrassment.
In the 1930s the Dutch cabinet knew very well that they likely couldn't keep up neutrality. But they also knew there was no chance in hell that they could build up an army in 3 years that could stop Hitler. So what did they do? Lie to the public and secretly open Canadian bank accounts.
Why does US debt even matter? Why does GDP even matter? Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants. All these abstractions don’t measure what matters anyway.
"Argentina, like many other chronic-inflation economies, went through repeated cycles of hyperinflation followed by attempts at stabilization. A typical cycle in such an inflationary economy begins with acceleration of money creation to accommodate the government's budgetary needs. As inflation accelerates, political pressure to reduce inflation builds, leading to an eventual "monetary reform." Such reforms usually include the introduction of a new currency (which is convenient since inflation has usually moved the nominal prices of goods and services into the thousands, million, billions, or even trillions of units of the old currency) and promises on the part of the government (which is in charge of the budget) and the central bank (which is in charge of issuing money and is often under direct control of the government) to follow rules leading to slower monetary growth in the future."
US cannot default on US debt. It is not possible. World reserve=US does not work the same way. Most politicians know that the debt does not matter, but will use it as a rhetorical device. Does the treasury yield rate matter to the US gov, like the people at the top making the decisions, in any critical sense? I kind of feel like they can control it through policy or the fed, since $USD is literally what the world runs on. So even tho treasury repayments on huge debt amounts now comprise a considerable slice of the budget, and the story is that US cannot afford to support its citizenry, cos they are in debt, I suspect that they could exert far more influence over this if they chose to.
The yield rate does mater in that it's correlated to inflation. If the yield goes up, investors sell bonds, and prices go up.
Modern Monetary Theory says that's OK. You stop the pretense of borrowing, then print as much money as you want. You then control inflation by taxation, and then simply burning the dollars you collect.
But the switch from one to the other would be unpleasant, since a lot of bond holders are depending on their bonds being worth more than the purchase price after inflation.
Couldn't the treasury very literally decide not to pay bond coupon or not return capital? Isn't that why the US treasury has long been considered the safest of investments?
Or is this some terminology lawyering that default is a legal term that doesn't apply to a sovereign?
The GDP-relative amount of US debt held by foreign investors has actually gone down on since 2014: https://fred.stlouisfed.org/series/HBFIGDQ188S
Am also casually looking at FRED. RE 2014 decline - do you know why this was? I speculate something to do with the initial invasion of Ukraine / China cycling out of treasuries possibly to buy Russian war bonds or oil. I am purely speculating.
We don't hear anything about it because the Republicans are in charge. If a Democrat was in the White House right now you wouldn't be able to shut Fox News and it's ilk up about how the national debt is a harbinger of doom for the entire country.
It’s not just US debt that’s a problem. It’s also state level and local level. Every part of our government is spending irresponsibly. A lot of the debt is hidden too. A pension with more future liabilities than it can pay for isn’t going to show up as deficit on this year’s budget. A state putting out bonds may count interest payments in the budget numbers that show up in press conferences, but the actual total debt isn’t talked about much.
I’m not sure why anyone expects differently. Politicians corruptly waste money to helping themselves, their careers, their party, and their causes. It’s other people’s money that they are spending. And most of them never had substantial experience in private industry to learn the skills it takes to manage billions of dollars of budget. Governments are far, far more wasteful and inefficient than anyone realizes.
> It’s not just US debt that’s a problem. It’s also state level and local level.
It’s also corporate level. Worse than government actually, because the government deficit is caused by several trillion-level tax cuts that were financed by government debt. Corporate debt comes on top of that.
> A lot of the debt is hidden too.
Accounting is even worse in corpo-land.
> Politicians corruptly waste money to helping themselves,
Again, Wall Street is worse, politicians don't become billionaires - billionaires buy their way into politics.
> Governments are far, far more wasteful and inefficient than anyone realizes.
Compared to corpo-land, governments are frugal.
A lot of American waste and spending is due to our incredibly wasteful and short-sighted perception of what urbanism looks like:
https://www.strongtowns.org/journal/2020-8-28-the-growth-pon...
I very often think about how much money Americans spend just on basic infrastructure needs compared to people who live in places built at a more sensible scale.
If I got a job in Arlington Texas right now, I’d first need to load myself up with a car payment and spend 4-5 figures per year just for basic needs like groceries and work, even if I lived within walking distance of that job.
Arlington, with a population of over 350,000, has no scheduled route public transportation service.
American towns and cities never seem to think about things like like “how many feet of sewer line/streets/utility lines and miles of road do we need for each resident?” or “how much population/economic activity per acre do we need to break even on services?”
Did you ever consider the idea that not everyone wants to live in the typical "urban" environment?
Not having public transportation or high-density housing nearby is a feature and a desirable property.
> I’d first need to load myself up with a car payment and spend 4-5 figures per year
Also a feature: if you can't afford this, perhaps that isn't the community for you?
This is a fairly typical agenda: "I want to spend your money turning your city into something you don't want it to be so some theoretical utopia can be actualized."
No matter how much crying and extolling of virtues you do: nothing is going to make me ride the bus. No matter how many "road diets" you impose, no matter how many lanes you kill by dedicating them to buses: I'm not going to ride your bus system. I'll just take my tax dollars (which far exceed that of typical bus ridership) elsewhere.
I ride the subway everywhere in NYC, but not every city needs to become NYC.
Part of what I think they were getting at is that suburban living is usually a long term burden on state budgets because the lower density means that maintenance costs aren't fully covered by tax revenue. If people want to live in these communities they should be expected to cover the costs, but since the necessary tax increases aren't popular they never get passed and the budget becomes unbalanced
Even worse, this cycle has been repeating since the advent of the automotive suburb:
1. New suburb is built, new residents are attracted by new housing stock and good value.
2. 40 years pass, the built infrastructure has aged to the point of needing refurbishment or replacement
3. Suburban government is forced to raise property taxes to cover maintenance
4. Affluent residents leave as they are attracted to a more recently built suburb with new housing stock and lower property taxes
5. Repeat steps 2-4
I completely understand your reaction, and it's a very typical one when I talk about this subject. I hope you're willing to engage in a productive conversation and maybe you'll come away with at least a little new perspective.
I am not at all advocating for stifling urban density. I never suggested that nor ever talked about building subways or skyscrapers.
The organization I linked to is called "Strong Towns" not "Strong Cities" and that is on purpose.
> Also a feature: if you can't afford this, perhaps that isn't the community for you?
Let's reframe this: If I'm a business owner, I can pay an American breadwinner $100,000 and they'll spend $10,000 on transportation per year for their family. Or, I can hire someone who lives in a place where they don't have to spend that much and I can pay them $95,000 a year. Maybe that other family only owns one car per family instead of two, I'm not even saying that they never drive. They just don't have to use a car to reach 100% of the destinations they want to reach in their life (grocery store, school, work, playground, etc).
This is what I'm really getting at here: Americans collectively blowing all this money on longer roads and sewer lines and a bunch of half-empty parking lots that don't generate tax income and economic activity makes America less competitive on the global stage. It’s a silent drag on the economy.
This is before we even dive into the rabbit hole of the statement you just made: that you implicitly believe that this self-reliant car-dependent transportation system makes it more difficult to be poor. What happens if my car breaks down before my first day at work at an entry level hourly job? I'm going to be fired, and then I will have no job to pay for fixing my car.
You don't even have to be pro-urbanism or prefer to walk to places to understand that argument.
> This is a fairly typical agenda: "I want to spend your money turning your city into something you don't want it to be so some theoretical utopia can be actualized."
1. What do you want your city to be? Can you describe it? What environments in your city/town do you enjoy spending time in? Which ones do you find uncomfortable to be in? What's it like to stand in those places, outside of your vehicle?
2. Is the utopia theoretical? Try visiting the downtown of any small railroad town in the US and observe the scale of it. How many millions of Americans per year travel internationally to experience walkable environments? Small towns that are comfortable to traverse without driving do exist: https://www.youtube.com/watch?v=ztpcWUqVpIg
> No matter how much crying
I do not recall crying
> nothing is going to make me ride the bus
> I ride the subway everywhere in NYC
Now you're sending mixed signals, I guess. My hypothesis is that you don't actually know what it's like to ride the bus, and the idea scares you. I hear you. You've probably never been on one that is frequent or pleasant, probably just your typical infrequent broken-down slow bus that is underfunded in America, the kind of bus where you have to be extremely desperate to resort to using it. So you get on the bus and that's the demographic, and it makes you uncomfortable.
Have you ever been to Disney World? Did you ride the bus there? Why didn't you just drive up to the gate?
Have you ever ridden a bus from the airport parking to the airport? Why did you do that? Why not just drive up to the airport?
> no matter how many lanes you kill by dedicating them to buses
Even if you prefer to drive, you should actually want what I want, because it alleviates traffic. If your goal is to get more people to drive, you will have more traffic.
> I'll just take my tax dollars (which far exceed that of typical bus ridership) elsewhere.
The place you are taking your tax dollar is into sewer line reconstruction. it really isn't even all that much about transportation itself, it's about property tax efficiency.
[dead]
100% debt-to-GDP sounds like some fundamental threshold when it's actually just a Schelling point. It's 1.00 GDP-years of debt, which is a number with an arbitrary time unit in it (why not GDP-month or GDP-decade?)
Yearly income is a usual metric
Remember the Tea Party?
But yes you don't hear anyone about this because politicians waste no time on things they know they can't fix. DOGE was a fucking embarrassment.
In the 1930s the Dutch cabinet knew very well that they likely couldn't keep up neutrality. But they also knew there was no chance in hell that they could build up an army in 3 years that could stop Hitler. So what did they do? Lie to the public and secretly open Canadian bank accounts.
Why does US debt even matter? Why does GDP even matter? Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants. All these abstractions don’t measure what matters anyway.
> Just print some cash and cancel the debt if the borrowers and creditors are two pockets on the same pants.
With such a great plan what could possibly go wrong?
https://www.reed.edu/economics/parker/f13/201/cases/Argentin...
"Argentina, like many other chronic-inflation economies, went through repeated cycles of hyperinflation followed by attempts at stabilization. A typical cycle in such an inflationary economy begins with acceleration of money creation to accommodate the government's budgetary needs. As inflation accelerates, political pressure to reduce inflation builds, leading to an eventual "monetary reform." Such reforms usually include the introduction of a new currency (which is convenient since inflation has usually moved the nominal prices of goods and services into the thousands, million, billions, or even trillions of units of the old currency) and promises on the part of the government (which is in charge of the budget) and the central bank (which is in charge of issuing money and is often under direct control of the government) to follow rules leading to slower monetary growth in the future."
The abstractions are the veil that make the theft slightly less obvious