As long as there's the possibility of a Trump/GOP reelection, whether 2024 or later, and MAGA dominates the GOP, Fitch have a point in looking to possible government financial instability. I imagine this has an immediate impact on the cost of US borrowing?
As long as there's the possibility of a Trump/GOP reelection, whether 2024 or later, and MAGA dominates the GOP, Fitch have a point in looking to possible government financial instability. I imagine this has an immediate impact on the cost of US borrowing?
Frank, from my own perspective as an engineer, not an economist (meaning I can use non-linear models, the vast majority of economic models are linear):
It has been clear since the Trump tax cuts and perhaps even since the Bush II tax cuts that US debt is not sustainable. Right now, the US relies on the fact that we are the world's resolution/reserve currency to support our debt. However, there are efforts to erode the status of the dollar. It will take time, but, the fact that we have unsustainable debt SUPPORTS moving to a more stable currency for worldwide transactions.
Additionally, we grew our debt by a trillion dollars in something like a month or two recently.
Lastly, and most telling, our debt is 129% of the Gross Domestic Product. The last time it was this high was at the end of WW II. Then, taxes were raised to pay down that debt and that debt was lowered to near zero under Jimmy Carter.
Then, Reagan, while talking about "fiscal responsibility" went on spending spree AND lowered taxes AND sponsored TWO recessions. He did all this while brainwashing America into thinking he had a great economy.
As long as Republicans are unwilling to raise taxes even on Warren Buffett who has VOLUNTEERED to pay higher taxes publicly, the US is in real threat of default on its debt.
I think that another one or two downgrades is more accurate than the current rating made yesterday.
US debt is in real, obvious, serious trouble of real default. Making that clear to the suckers who are buying it is important.
Last, but far from least: Trump is reasonably likely to be President again. US debt could be worthless fairly soon after that. Trump has authored bankruptcy no less than SIX times in his life. Bankruptcy is Trump's ONLY real expertise in his life.
I think you’re stuck in the deficit myth. The current economic models are still built on an idea of economics as a mathematical model, and there is just no way to take into account all the variables. It’s more complex than climate.
I’m a scientist, which is very different from being an engineer, and I’m able to juggle very complex systems. I think the deficit is quite manageable as long as there is growth and economic activity, just as Keynes taught. And that’s what’s fueling the economy. I do agree the W II and drumpf cuts, hell let’s go back to Reagan, have been stupid.
I would probably be more worried had I not had Stephanie Kelton read the Defict Myth to me.
Three times, because the first two I couldn’t quite think it could be true. Ideas so contrary to the “popular opinion”( and we know what that’s worth).
Jen, I am not nearly as sanguine about debt at 130% of GDP. After WW II, with MUCH higher tax rates than today, the debt was small but not zero 30 years later.
So. IF we revert to the tax and spending ratios post WW II it will be 30 years, maybe, to get back to solid.
Not including Trump’s Openly spoken threat to just default. Right? He is working for Putin.
"Reasonably likely" makes no sense. He's either likely, or he isn't. And he isn't, in my opinion. But he's out for retribution, as is the Republican party, whom he has convinced that he's a victim of the mythical "deep state," Hillary Clinton, Joe Biden, the "Swamp," and damn it, when he was five the Tooth Fairy forgot to leave a dime under his pillow. Trump is capable of even more damage than he's already done, and he's going to get worse.
"I imagine this has an immediate impact on the cost of US borrowing?"
I'm no financial whiz, but the short answer is no.
For what it's worth, Goldman Sachs said the report "contains no new information and "should have little direct impact." Jamie Dimon (JPMorganChase) called it "kind of ridiculous" but thinks it "doesn't really matter." So... *shrugs?*
I don't like him on a personal level in any way. But he is one of the top bankers in the world, so in this specific case his opinion was relevent, I felt.
As long as there's the possibility of a Trump/GOP reelection, whether 2024 or later, and MAGA dominates the GOP, Fitch have a point in looking to possible government financial instability. I imagine this has an immediate impact on the cost of US borrowing?
Frank, from my own perspective as an engineer, not an economist (meaning I can use non-linear models, the vast majority of economic models are linear):
It has been clear since the Trump tax cuts and perhaps even since the Bush II tax cuts that US debt is not sustainable. Right now, the US relies on the fact that we are the world's resolution/reserve currency to support our debt. However, there are efforts to erode the status of the dollar. It will take time, but, the fact that we have unsustainable debt SUPPORTS moving to a more stable currency for worldwide transactions.
Additionally, we grew our debt by a trillion dollars in something like a month or two recently.
Lastly, and most telling, our debt is 129% of the Gross Domestic Product. The last time it was this high was at the end of WW II. Then, taxes were raised to pay down that debt and that debt was lowered to near zero under Jimmy Carter.
Then, Reagan, while talking about "fiscal responsibility" went on spending spree AND lowered taxes AND sponsored TWO recessions. He did all this while brainwashing America into thinking he had a great economy.
As long as Republicans are unwilling to raise taxes even on Warren Buffett who has VOLUNTEERED to pay higher taxes publicly, the US is in real threat of default on its debt.
I think that another one or two downgrades is more accurate than the current rating made yesterday.
US debt is in real, obvious, serious trouble of real default. Making that clear to the suckers who are buying it is important.
Last, but far from least: Trump is reasonably likely to be President again. US debt could be worthless fairly soon after that. Trump has authored bankruptcy no less than SIX times in his life. Bankruptcy is Trump's ONLY real expertise in his life.
I think you’re stuck in the deficit myth. The current economic models are still built on an idea of economics as a mathematical model, and there is just no way to take into account all the variables. It’s more complex than climate.
I’m a scientist, which is very different from being an engineer, and I’m able to juggle very complex systems. I think the deficit is quite manageable as long as there is growth and economic activity, just as Keynes taught. And that’s what’s fueling the economy. I do agree the W II and drumpf cuts, hell let’s go back to Reagan, have been stupid.
But let’s hold our fire on the deficit for now.
Thank you, Jen. There’s no need for panic over the debt or the deficit. Which has been shrinking under Biden.
I would probably be more worried had I not had Stephanie Kelton read the Defict Myth to me.
Three times, because the first two I couldn’t quite think it could be true. Ideas so contrary to the “popular opinion”( and we know what that’s worth).
Jen, I am not nearly as sanguine about debt at 130% of GDP. After WW II, with MUCH higher tax rates than today, the debt was small but not zero 30 years later.
So. IF we revert to the tax and spending ratios post WW II it will be 30 years, maybe, to get back to solid.
Not including Trump’s Openly spoken threat to just default. Right? He is working for Putin.
"Reasonably likely" makes no sense. He's either likely, or he isn't. And he isn't, in my opinion. But he's out for retribution, as is the Republican party, whom he has convinced that he's a victim of the mythical "deep state," Hillary Clinton, Joe Biden, the "Swamp," and damn it, when he was five the Tooth Fairy forgot to leave a dime under his pillow. Trump is capable of even more damage than he's already done, and he's going to get worse.
I dunno, I'm 65 and I've ben hearing that unsustainable argument my entire life. It hasn't happened yet.
:)
There's that word "terrifying" again. Stop using it, please. We are not sniveling children who are "terrified" of nightmare scenarios. We are adults.
Correct.
Well. Then, you go right ahead and be "terrified." It's neither ill mannered nor immature to call for courage in hard times, but hey, what do I know?
Please may we not have a public trial!
But. All trials ARE public. Are they not?
If people are allowed in the courtroom, but some are closed or limited to observers. Federal trials aren’t televised because of safety concerns.
Thank you. 😊
"I imagine this has an immediate impact on the cost of US borrowing?"
I'm no financial whiz, but the short answer is no.
For what it's worth, Goldman Sachs said the report "contains no new information and "should have little direct impact." Jamie Dimon (JPMorganChase) called it "kind of ridiculous" but thinks it "doesn't really matter." So... *shrugs?*
Jaime Dimon is a nothing. He would take the last penny from a widow.
I don't like him on a personal level in any way. But he is one of the top bankers in the world, so in this specific case his opinion was relevent, I felt.
YES ! Put the BLINDERS ON ! , and Get Ready , for the " BIG FLUSH !! " WAKE UP ! , MANKIND ! JESUS ! , is at Your FRONT DOOR ! ( LORD! , Have MERCY !)
https://heathercoxrichardson.substack.com/p/august-2-2023/comment/21791343