DEBT SPIRAL: Interest costs on U.S. debt to exceed economic growth by 2045💸💸💸 (1 Viewer)

[Econ4every1]

When the amount of debt becomes so enormous it will have

Debt relative to what?


Respectfully, numbers are just numbers, but they represent something in the real world. Saying "big number bad" is no way to evaluate the value, stability or resiliency of the US dollar. The numbers are big...But it's worth knowing they aren't big at all relitive to total wealth.




If we knock a few zeros off, but keep the ratio's the same, this would be a fantastically successful business.

Let's say $35 billion in debt and $214 billion in assets.


There is so much wealth, that per citizen there is over $636,000 per citizen (Debt Clock removed this bottom row recently so I can't have up to the moment numbers).

So $104k of debt per citizen and $636k in wealth.

The problem isn't the economy, the problem is, averages are over the entire population. Less than 10% of people have a net of $500k in wealth (subtracting debt per citizen from wealth per citizen). That means that the vast, vast majority of the wealth is in the top 10%. Yet they want you to feel like the bottom 90% is mostly responsible for it.

See the problem?

Here. This is a real chart that shows wealth of the bottom 50%, then next 40$, the next 9% and the next 1%

 

[rahl]

Yes, the incentives are all wrong, and they stay wrong even when the state attempts to run public schools or a universal healthcare system. You don't trust the state to build cars, yet the same backwards-incentive-facing state should provide healthcare and education? How does that make sense.

Because healthcare and education aren’t commodities, and the government is more efficient at providing them as a result.

 

[Econ4every1]

Because healthcare and education aren’t commodities, and the government is more efficient at providing them as a result.

Or, if you don't mind me adding this....

When you commoditize them, the incentives of the private sector are to figure out how to make more money and provide less service, goods, pay, and benefits.

That said, in a highly competitive environment, those problems can be minimized perhaps even eliminated, but without a government capable and willing (the problem we have today), to maintain the highly competitive nature of our private sector (both business and labor), we see less and less competition (real competition), allowing a few large companies to own the vast majority of what we buy.

The only counterbalance is government. The government has operated under a Neoliberal model for the last 45 years and it's been an abject failure.

 

[aociswundumho]

When you commoditize them, the incentives of the private sector are to figure out how to make more money and provide less service, goods, pay, and benefits.

In a competitive market, the incentive is to do more for less to attract customers. "Provide less" only happens in heavily regulated markets where competition is suppressed (like healthcare).

That said, in a highly competitive environment, those problems can be minimized perhaps even eliminated, but without a government capable and willing (the problem we have today), to maintain the highly competitive nature of our private sector (both business and labor), we see less and less competition (real competition), allowing a few large companies to own the vast majority of what we buy.

1) So first you say competition minimizes problems, then you claim competition is shrinking under less government involvement. Again, that's backwards. It’s government regulations, subsidies, and licensing that entrench dominant players and stifle competition.

2) You assume government ensures competition, when in fact it is the state that create barriers to entry leading to less competition.

3) You claim we are seeing more concentration, but you don’t explain how the lack of government intervention could lead to this.

The only counterbalance is government. The government has operated under a Neoliberal model for the last 45 years and it's been an abject failure.

So you're going to ignore the massive gains in global wealth and poverty reduction.

 

[MTAtech]

Where is the evidence Medicaid is being "savaged"?
The Administration wants to cut back on the rate of growth of Medicaid costs and enrollments. That is not reducing Medicaid.

The nonpartisan Congressional Budget Office recently calculated that achieving those savings would not be possible without cuts to Medicaid, which accounts for 93% of non-Medicare mandatory spending under the jurisdiction of the Energy and Commerce Committee.

 

[aociswundumho]

Because healthcare and education aren’t commodities,

Sure they are. Both involve scarce resources, prices, supply/demand, and trade-offs, i.e. classic commodity behavior.

and the government is more efficient at providing them as a result.

If the state is more efficient at providing healthcare, then why is the average wait time from initial visit to treatment over 6 months in Canada?

If the state is more efficient at providing education, why do why do over half of all Americans read at a sixth grade level?

If the state is bad at making cars (a complex good), why would it suddenly be better at managing even more complex systems like healthcare and education, which require constant human judgment and adaptability?

Perhaps @Econ4every1 will help you out with that last one.

 

[jaypatriot]

The nonpartisan Congressional Budget Office recently calculated that achieving those savings would not be possible without cuts to Medicaid, which accounts for 93% of non-Medicare mandatory spending under the jurisdiction of the Energy and Commerce Committee.

So what you are forecasting has not yet happened.
How far do you believe your pessimism will take you this year?
Are you stocked up on toilet paper and eggs.?

 

[rahl]

Sure they are.

They aren’t.

Both involve scarce resources, prices, supply/demand, and trade-offs, i.e. classic commodity behavior.

No.

If the state is more efficient at providing healthcare, then why is the average wait time from initial visit to treatment over 6 months in Canada?

It isn’t.

If the state is more efficient at providing education, why do why do over half of all Americans read at a sixth grade level?

They don’t.

If the state is bad at making cars (a complex good), why would it suddenly be better at managing even more complex systems like healthcare and education, which require constant human judgment and adaptability?

Because healthcare and education aren’t commodities

Perhaps @Econ4every1 will help you out with that last one.

I don’t need any help. I’ve adequately corrected

 

[aociswundumho]

No.

Yes, actually. The medical tourism industry couldn't exist otherwise:

It isn’t.

I'm afraid it is.

They don’t.

I'm afraid they do:

54% of adults have a literacy below a 6th-grade level 20% are below 5th-grade level).

I don’t need any help. I’ve adequately corrected

If you say so.

 

[rahl]

Yes, actually. The medical tourism industry couldn't exist otherwise:

Medical tourism means us citizens traveling abroad to government run healthcare too lol.

I'm afraid it is.

No it isn’t.

I'm afraid they do:

No they don’t.

If you say so.

I don’t say so. Reality does.

 

[Econ4every1]

In a competitive market, the incentive is to do more for less to attract customers.

I addressed this.

That said, in a highly competitive environment, those problems can be minimized perhaps even eliminated

The problem is, markets aren't really competitive

...the incentive is to do more for less to attract customers.

That's not how modern corporate capitalism works.

"Provide less" only happens in heavily regulated markets where competition is suppressed (like healthcare).

So government regulates healthcare.
Government is corrupted by big business.
The solution is to address the symptom (corruption in government) not the problem, the people perpetrating the corruption.
So you think, that eliminating the government will stop corruption?

You can't possibly be that naive?

Liquor stores get robbed so we have to get rid of liquor stores.

So you're going to ignore the massive gains in global wealth and poverty reduction.

My comment:

The only counterbalance is government. The government has operated under a Neoliberal model for the last 45 years and it's been an abject failure.

So my comment had nothing to do with global capitalism, I was referring to the reality here in the US.

So, let's look, capitalism, according to you has lowered global poverty. I'd ague that was free trade, which is component of capitalism, but capitalism doesn't have the monopoly on it.

But, if you are right, and capitalism is a driver of wealth for the poor, then the bottom 50% of Americans are getting wealthier over time?


Yeah, not so much. Why? Because giving more money to wealthy people makes the bottom 1/2 of America poorer.

 

[Econ4every1]

Sure they are. Both involve scarce resources, prices, supply/demand, and trade-offs, i.e. classic commodity behavior.

You can commoditize healthcare, but that is about as immoral as it gets, so I'm not surprised you think this is ok.

 

[Econ4every1]

why would it suddenly be better at managing even more complex systems like healthcare and education, which require constant human judgment and adaptability?

So would you say the system we have right now is efficient?

We have the highest cost per capita and some of the lowest medical outcomes among comparable societies.
So getting to a doctor quick is how you measure outcomes? What about cost? What about results?

 

[aociswundumho]

You can commoditize healthcare, but that is about as immoral as it gets, so I'm not surprised you think this is ok.

Labeling healthcare commodification as “immoral” ignores how markets actually help people. The best thing we could do is Walmartize healthcare, and bring prices down through competition. Market forces drive innovation, lower costs, and speed the development of life-saving treatments. Lower prices naturally increase access, making care available to more people. On top of that, competition gives patients real choices instead of locking everyone into a one-size-fits-all system. Without market incentives, you don’t just lose “greed”, you lose progress.

 

[aociswundumho]

So would you say the system we have right now is efficient?

The system we have now is regulated capitalism, and it's obviously terrible. However the system is great for "the worker". Doctors are the highest paid profession in the country, and nurses average about $50 per hour.

We have the highest cost per capita and some of the lowest medical outcomes among comparable societies.
So getting to a doctor quick is how you measure outcomes? What about cost? What about results?

Both are terrible under the regulated capitalism model. Costs are through the roof, and medical errors are the third leading cause of death. Speed of service is also shit. Dealing with a hospital today is like dealing with any other government regulated monopoly - it's awful.

 

[aociswundumho]

So government regulates healthcare.
Government is corrupted by big business.
The solution is to address the symptom (corruption in government) not the problem, the people perpetrating the corruption.
So you think, that eliminating the government will stop corruption?

More like:

1) Industries often demand regulation - not to protect consumers, but to crush competition.

a. Taxi companies lobbied for rules that made it harder for Uber and Lyft to operate.
b. Construction trades push for strict licensing to keep newcomers out.
c. Major food producers like nestle and kraft support food safety laws that small competitors can’t afford to comply with.

2) Politicians and regulators, eager to "do good" and to fix "market failures" end up doing something else entirely:

a. Regulatory capture - like the sec cozying up to wall street and failing to prevent the 2008 crash.
b. The revolving door - regulators leaving office to become well-paid consultants or board members in the very industries they once oversaw. I can list names.

3) None of this is illegal - so it's not corruption. It’s just democracy working as intended.

4) You’d have to be blind not to see the pattern: when big business and big government get in bed together, the public gets screwed. The housing market is another example.

 

[eohrnberger]

Yes, actually. The medical tourism industry couldn't exist otherwise:

View attachment 67568203



I'm afraid it is.

https://www.thenationalliteracyinstitute.com/post/literacy-statistics-2024-2025-where-we-are-now

I'm afraid they do:

The statistics in the cited article:

Literacy Statistics 2024- 2025 (Where we are now)

The capacity to read and write, commonly known as literacy, stands out as a pivotal determinant in shaping an individual's career trajectory. Individuals with literacy skills have access to a broad spectrum of career possibilities, including highly skilled and well-paying positions. Conversely...

www.thenationalliteracyinstitute.com

are very concern raising.
https://www.thenationalliteracyinstitute.com/post/literacy-statistics-2024-2025-where-we-are-now

If you say so.

 

[rahl]

Labeling healthcare commodification as “immoral” ignores how markets actually help people. The best thing we could do is Walmartize healthcare, and bring prices down through competition. Market forces drive innovation, lower costs, and speed the development of life-saving treatments. Lower prices naturally increase access, making care available to more people. On top of that, competition gives patients real choices instead of locking everyone into a one-size-fits-all system. Without market incentives, you don’t just lose “greed”, you lose progress.

Healthcare isn’t a commodity as you’ve been shown. Single payer systems provide better care at a fraction of the cost of the US system.

 

[trumptman]

I think what you mean, to be fair is that the debt significantly increased under Obama, the deficit decreased.

However, this is a superficial understanding of what really happened. It's kind of like showing up at the scene of an accident and drawing conclusions based on what you see, without understanding the events that lead up to it.



What can we conclude?

The red line is the deficit. The net between money added to the economy from government spending and taxes. When the red line is at zero, the government's spending and taxation for that period are equal.

Now, take notice of the green line, relative to the red line. Notice how around 2000 it hits zero or slight above. What happens to the green line? The green line reacts to the movement of the red line. If it falls below, that's bad, really bad. It means that the private sector is net dis-saving. The closer to zero the red line the less money the private sector has. Under Obama we see emergency legislation put into place. What's really happening is the government is shifting private sector debt out of the private sector and onto the government. The blue arrow shows where TARP is signed into law, and the yellow arrow shows the effect on the private sector.

The point is, you cannot save your paw to prosperity. Every dollar the government saves is a dollar dis-saved from the rest of the world (mostly here in the US). The US government basically has to dump the money back into the US economy it removed in the 1990's, the problem, and now this is my opinion, is that most of the money "put back" is used to bail out banks and other private institutions. So the average person lost money in the 1990's and then again, in over-leveraging of the mid 2000's and the government bailed out the investor class in the 2010s and beyond.

By 2009, under Obama defects are cut year after year and private sector savings, predictably declines.

Just got to this and the other two times you posted it.

You should just be more brief and say... yo, bro, MMT and then we can just reply with all the conventional criticisms and concerns around it.



I mean starting with if debt isn't a real concern and spending short of inflation isn't a real concern and taxes are just a form of inflation management, then at some point you have to get beyond "management of societal concerns and equity" when it comes to "taxing the rich".

I understand the premise of MMT but it really falls apart on the explanation of the taxation angle. It becomes too many rainbows and unicorns there.

 

[OrphanSlug]

Just got to this and the other two times you posted it.

You should just be more brief and say... yo, bro, MMT and then we can just reply with all the conventional criticisms and concerns around it.



I mean starting with if debt isn't a real concern and spending short of inflation isn't a real concern and taxes are just a form of inflation management, then at some point you have to get beyond "management of societal concerns and equity" when it comes to "taxing the rich".

I understand the premise of MMT but it really falls apart on the explanation of the taxation angle. It becomes too many rainbows and unicorns there.

Given the above, you clearly do not understand economics nor what MMT is really about.

 

[trumptman]

Given the above, you clearly do not understand economics nor what MMT is really about.

Isn't it funny how folks like yourself never have cite, explain or prove anything. They just dismiss and declare themselves the one true way.

Messiah complexes are so fun these days.

 

[OrphanSlug]

Isn't it funny how folks like yourself never have cite, explain or prove anything. They just dismiss and declare themselves the one true way.

Messiah complexes are so fun these days.

And you do... go look in the mirror.

 

[JohnfrmClevelan]

Isn't it funny how folks like yourself never have cite, explain or prove anything. They just dismiss and declare themselves the one true way.

This is your thread, and you obviously think that the national debt is a problem.

Do you think that a government with its own currency goes into real, household-style debt when they issue bonds? Or is it merely another way that they exercise their power to create and spend currency, just with another step added?

 

[Kushinator]

This is your thread, and you obviously think that the national debt is a problem.

Do you think that a government with its own currency goes into real, household-style debt when they issue bonds? Or is it merely another way that they exercise their power to create and spend currency, just with another step added?

We've been through this already. The risk is crowding out private investment. If you switch to a model where Congress can bypass financial intermediaries, you WILL debase the currency. Sometimes inflation (debasement) is necessary as long as it's a short duration and not astronomical (above 10% brews additional inflationary froth).

 

[JohnfrmClevelan]

We've been through this already. The risk is crowding out private investment. If you switch to a model where Congress can bypass financial intermediaries, you WILL debase the currency. Sometimes inflation (debasement) is necessary as long as it's a short duration and not astronomical (above 10% brews additional inflationary froth).

We've already got a pretty big pile of treasuries out there. Shouldn't any debasement have occurred already?