6 ms·

America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency t

America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe...

bijowo1676 6mo ago
elections have consequences...
- laughing_man 6mo ago
  [flagged]
  - rapind 6mo ago
    This glosses over what Bush was handed from the previous guy and then what he left behind for the next guy.
    - laughing_man 6mo ago
      The "previous guy" was constrained by a once-in-a-lifetime Congress that was serious about deficits, and he also benefited by another once-in-a-lifetime spurt of economic growth that dramatically increased tax revenue. As soon as Congress realized they'd been handed a deficit-free budget they went about spending with wild abandon. And anyway, since that guy we've had two presidents over three terms where the other party controlled the presidency and they didn't and they certainly didn't break the pattern. Let me ask you this: If you wanted to vote for a guy (or gal) who was serious about reducing the deficit instead of someone who doesn't care as long as the wheels don't come off during his term, who would you vote for?
      - AnthonyMouse 6mo ago
        Here's the better question: If you were serious about reducing the deficit, what would you cut? It should be possible to reduce Medicare costs significantly by going after healthcare costs in general, i.e. create a ton of new medical residency slots and train a lot of new doctors, and make the healthcare companies actually compete with each other. The AMA and healthcare companies are going to fight you hard. We currently make large social security payments to affluent retirees who paid in less than we're paying them out. We could reform the system to cost less, i.e. not pay out as much to people who don't need the money. The AARP isn't going to like it. The DoD budget is pretty big and a lot of it is waste or corruption. But to do this well you have to be good at identifying which parts, you still can't eliminate all of it because some of it is pretty important, and this one is the smallest of the three. And the defense contractors will try to stop you. To make a meaningful dent in the deficit you would have to do at least two of those but no one is willing to do any of them.
        laughing_man 6mo ago
        Agreed. This should have been addressed decades ago, and every year that goes buy it will get harder to deal with. Me, I'd cut everything. Right now, when interest rates are relatively low, we're spending more to service the debt than we're spending on defense. This isn't a problem we can address with half measures.
        rapind 6mo ago
        The giant sacred cows are Defence (War) and Social Security. Could probably solve the deficit pretty quickly by getting money out of politics, especially defence contractor and AIPAC money. That would require a significant political overhaul though.
  - aloha2436 6mo ago
    > More importantly, in the context of this discussion, every president since Bush's first term has had larger deficits than any previous president, regardless of party. Taking on long term debt at or below the risk free rate _is the point._ It didn't devalue the currency because the global economy was structured around buying that debt. You just need to not jeopardize that second point.
    - laughing_man 6mo ago
      It's a snowball rolling downhill that's reached the point where it is out of control. We cannot stop taking on more debt, which is, let's face it, just printing money electronically. At some point everything will blow up. I just hope it doesn't happen until I'm gone.
rapind 6mo ago
> someone too stupid to understand That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.
- ejoso 6mo ago
  Say more
  - BobbyJo 6mo ago
    Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when the checks stop coming. We're basically the national equivalent of a middle manager who's forgotten all the skills that got him there, and we can voluntarily move back down and start to work in earnest again, or wait to get laid off with no severance.
    - fnordpiglet 6mo ago
      As someone who lives a day to day life, I’m pretty happy for things that are good for my day to day life. Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch. I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate. Effectively most technology, especially software, but hardware as well, is concentrated in the US. Some aspects of the heavy manufacturing and assembly line happens elsewhere but I’d level the middle manager more at the EU. No, we are taking our advantages and lighting them on fire for no obvious reason. Backing into a rationale doesn’t make it rational. Its Christian nationalism fueling raging narcissism made malignant due to senility. Theres no experts, no adults, no experienced people - they’ve all be fired and replaced with sycophantic photogenic personalities. This is not good, there is no upside, it’s Nero hosting UFC while the empire burns. The only out I see is nature helping end this or a total seismic change in Congress and removal from office. Then rebuilding can start and maybe there’s something to salvage. But I doubt it, and I expect the next generations will exist in the rubble of the colosseum.
shake_head_pig2 6mo ago
[dead]
epolanski 6mo ago
And yet the current administration is fixated with trade balance (which conveniently ignores the most important US export that's not accounted: services). Look at them countries sending food, cars, machinery for pieces of paper. They taking advantage of us!
epolanski 6mo ago
US will have to refinance $ 10T of debt next year. That's a gargantuan amount of money and I see no scenario in which this won't have quite higher yields than the expiring one, remnant of the low rate decade. With foreigners and hedge funds less prone to buy US debt right now it's going to be quite interesting to see what will happen.
- Gud 6mo ago
  It’s going to be a couple of humbling decades for the USA. The western world was happy to keep the USA as a global police force, as long as they didn’t step too far out of line and at least paid lip service to international law. With that gone and now caring only about brazen self interest, there is little reason to support the USA as an ally, so they have been demoted to a trading partner(unwillingly). Honestly it’s much better to do trade with literally anyone else besides the USA.
neonstatic 6mo ago
I think pinning this on one guy is a gross oversimplification driven by personal dislike for that guy. In my opinion larger forces are at play. I don't mean it in a conspiratorial way; simply put, the structure of global trade, economy, military power, etc. have shifted to such a degree, that this process has become inevitable.
- throwaway315314 6mo ago
  Because such a system isn't just sunshine and rainbows like OP mentions and has real costs like ever increasing debt burdens and wealth and social inequality which naturally create political instability as lower classes and institutions become increasingly stressed. Trump is just a symptom of sentiment created by these consequences.
- ferfumarma 6mo ago
  The Clinton administration ran a budget surplus
  - neonstatic 6mo ago
    Again, that's a domestic issue. It was at a time, when all US adversaries were either in trouble or not stabilized yet.
  - dannyfritz07 6mo ago
    He ran a surplus by (In Bill Clinton's own words) "ending welfare as we know it". This was his description of the Personal Responsibility Act he signed. That attack on labor and bolstering of the financial markets was a huge contributor to our economic disasters. Keynesian was never meant to be a permanent solution to a growing capitalism system. And the Hayekian system we have now is just pillaging by neoliberals.
    - tasuki 6mo ago
      > ending welfare as we know it > That attack on labor How is ending welfare an "attack on labor"? (I live in a welfare state and am quite happy about it, despite it having very real financial consequences for me. Welfare state does not benefit "labor", but rather benefits the various people who either can't or don't want to perform labor)
expedition32 6mo ago
A lot of countries have their gold reserves in the US. It was a good idea once but there's no doubt in my mind that the Americans will confiscate it all.
- mothballed 6mo ago
  Not your keys, not your coin. America did it to its own people too.
skippyboxedhero 6mo ago
Not aware of what happened in the 70s then with Bretton Woods? Not aware of what happened pre-08? It has gone wrong multiple times before just for the US and the US exporting inflation is not good for either the US or the rest of the world. As with NATO, I am not sure what the argument is...yes, other countries should take more of a role in their own defence...yes, other countries should take more of a role in their own economic governance/financial stability. On this topic specifically though, I will also point out that whatever the faults of the US, no-one had a problem when Germany was exporting crippling levels of deflation (this is one of the main issues that wasn't solved after WW2 despite being identified by Keynes: deficit countries will be told they need to rebalance, but not surplus countries). Germany have solved that problem with catastrophically bad foreign policy destroying their economy (once again) but before this, they were the main source of global financial instability (China, to their credit, is probably one of the only countries ever to rebalance from surplus to deficit country...Germany has done this multiple times over the years and has blamed other countries every time). Other countries using gold instead of US debt is good for both the US and those countries. Most of the "increase" has been due to gold rising in value and, fundamentally, it cannot solve the problem because the price cannot rise as much as it needs to but it should be part of a mix with SDRs and other securities.
- the_gipsy 6mo ago
  gibberish
  - skippyboxedhero 6mo ago
    Nope, just economic history. People think the "new thing" is new...this has happened many times before. Macro tourists come in and think ten minutes with ChatGPT has turned them into an economist. Basic knowledge.
    - the_gipsy 5mo ago
      What's your point tho
cringleyrobert 6mo ago
Just make sure it’s real gold, not just a number on a spreadsheet, or a golden Twinkie made up of tungsten! India got caught with their heads in their asses with that one!
CGMthrowaway 6mo ago
Scott Bessent is literally the guy who broke the pound, I think he understands
deleted 6mo ago
[deleted]

bijowo1676 6mo ago

elections have consequences...

laughing_man 6mo ago
[flagged]
- rapind 6mo ago
  This glosses over what Bush was handed from the previous guy and then what he left behind for the next guy.
  - laughing_man 6mo ago
    The "previous guy" was constrained by a once-in-a-lifetime Congress that was serious about deficits, and he also benefited by another once-in-a-lifetime spurt of economic growth that dramatically increased tax revenue. As soon as Congress realized they'd been handed a deficit-free budget they went about spending with wild abandon. And anyway, since that guy we've had two presidents over three terms where the other party controlled the presidency and they didn't and they certainly didn't break the pattern. Let me ask you this: If you wanted to vote for a guy (or gal) who was serious about reducing the deficit instead of someone who doesn't care as long as the wheels don't come off during his term, who would you vote for?
    - AnthonyMouse 6mo ago
      Here's the better question: If you were serious about reducing the deficit, what would you cut? It should be possible to reduce Medicare costs significantly by going after healthcare costs in general, i.e. create a ton of new medical residency slots and train a lot of new doctors, and make the healthcare companies actually compete with each other. The AMA and healthcare companies are going to fight you hard. We currently make large social security payments to affluent retirees who paid in less than we're paying them out. We could reform the system to cost less, i.e. not pay out as much to people who don't need the money. The AARP isn't going to like it. The DoD budget is pretty big and a lot of it is waste or corruption. But to do this well you have to be good at identifying which parts, you still can't eliminate all of it because some of it is pretty important, and this one is the smallest of the three. And the defense contractors will try to stop you. To make a meaningful dent in the deficit you would have to do at least two of those but no one is willing to do any of them.
      - laughing_man 6mo ago
        Agreed. This should have been addressed decades ago, and every year that goes buy it will get harder to deal with. Me, I'd cut everything. Right now, when interest rates are relatively low, we're spending more to service the debt than we're spending on defense. This isn't a problem we can address with half measures.
        rapind 6mo ago
        The giant sacred cows are Defence (War) and Social Security. Could probably solve the deficit pretty quickly by getting money out of politics, especially defence contractor and AIPAC money. That would require a significant political overhaul though.
- aloha2436 6mo ago
  > More importantly, in the context of this discussion, every president since Bush's first term has had larger deficits than any previous president, regardless of party. Taking on long term debt at or below the risk free rate _is the point._ It didn't devalue the currency because the global economy was structured around buying that debt. You just need to not jeopardize that second point.
  - laughing_man 6mo ago
    It's a snowball rolling downhill that's reached the point where it is out of control. We cannot stop taking on more debt, which is, let's face it, just printing money electronically. At some point everything will blow up. I just hope it doesn't happen until I'm gone.

rapind 6mo ago

> someone too stupid to understand That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.

ejoso 6mo ago
Say more
- BobbyJo 6mo ago
  Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when the checks stop coming. We're basically the national equivalent of a middle manager who's forgotten all the skills that got him there, and we can voluntarily move back down and start to work in earnest again, or wait to get laid off with no severance.
  - fnordpiglet 6mo ago
    As someone who lives a day to day life, I’m pretty happy for things that are good for my day to day life. Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch. I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate. Effectively most technology, especially software, but hardware as well, is concentrated in the US. Some aspects of the heavy manufacturing and assembly line happens elsewhere but I’d level the middle manager more at the EU. No, we are taking our advantages and lighting them on fire for no obvious reason. Backing into a rationale doesn’t make it rational. Its Christian nationalism fueling raging narcissism made malignant due to senility. Theres no experts, no adults, no experienced people - they’ve all be fired and replaced with sycophantic photogenic personalities. This is not good, there is no upside, it’s Nero hosting UFC while the empire burns. The only out I see is nature helping end this or a total seismic change in Congress and removal from office. Then rebuilding can start and maybe there’s something to salvage. But I doubt it, and I expect the next generations will exist in the rubble of the colosseum.

shake_head_pig2 6mo ago

[dead]

epolanski 6mo ago

And yet the current administration is fixated with trade balance (which conveniently ignores the most important US export that's not accounted: services). Look at them countries sending food, cars, machinery for pieces of paper. They taking advantage of us!

epolanski 6mo ago

US will have to refinance $ 10T of debt next year. That's a gargantuan amount of money and I see no scenario in which this won't have quite higher yields than the expiring one, remnant of the low rate decade. With foreigners and hedge funds less prone to buy US debt right now it's going to be quite interesting to see what will happen.

Gud 6mo ago
It’s going to be a couple of humbling decades for the USA. The western world was happy to keep the USA as a global police force, as long as they didn’t step too far out of line and at least paid lip service to international law. With that gone and now caring only about brazen self interest, there is little reason to support the USA as an ally, so they have been demoted to a trading partner(unwillingly). Honestly it’s much better to do trade with literally anyone else besides the USA.

neonstatic 6mo ago

I think pinning this on one guy is a gross oversimplification driven by personal dislike for that guy. In my opinion larger forces are at play. I don't mean it in a conspiratorial way; simply put, the structure of global trade, economy, military power, etc. have shifted to such a degree, that this process has become inevitable.

throwaway315314 6mo ago
Because such a system isn't just sunshine and rainbows like OP mentions and has real costs like ever increasing debt burdens and wealth and social inequality which naturally create political instability as lower classes and institutions become increasingly stressed. Trump is just a symptom of sentiment created by these consequences.
ferfumarma 6mo ago
The Clinton administration ran a budget surplus
- neonstatic 6mo ago
  Again, that's a domestic issue. It was at a time, when all US adversaries were either in trouble or not stabilized yet.
- dannyfritz07 6mo ago
  He ran a surplus by (In Bill Clinton's own words) "ending welfare as we know it". This was his description of the Personal Responsibility Act he signed. That attack on labor and bolstering of the financial markets was a huge contributor to our economic disasters. Keynesian was never meant to be a permanent solution to a growing capitalism system. And the Hayekian system we have now is just pillaging by neoliberals.
  - tasuki 6mo ago
    > ending welfare as we know it > That attack on labor How is ending welfare an "attack on labor"? (I live in a welfare state and am quite happy about it, despite it having very real financial consequences for me. Welfare state does not benefit "labor", but rather benefits the various people who either can't or don't want to perform labor)

expedition32 6mo ago

A lot of countries have their gold reserves in the US. It was a good idea once but there's no doubt in my mind that the Americans will confiscate it all.

mothballed 6mo ago
Not your keys, not your coin. America did it to its own people too.

skippyboxedhero 6mo ago

Not aware of what happened in the 70s then with Bretton Woods? Not aware of what happened pre-08? It has gone wrong multiple times before just for the US and the US exporting inflation is not good for either the US or the rest of the world. As with NATO, I am not sure what the argument is...yes, other countries should take more of a role in their own defence...yes, other countries should take more of a role in their own economic governance/financial stability. On this topic specifically though, I will also point out that whatever the faults of the US, no-one had a problem when Germany was exporting crippling levels of deflation (this is one of the main issues that wasn't solved after WW2 despite being identified by Keynes: deficit countries will be told they need to rebalance, but not surplus countries). Germany have solved that problem with catastrophically bad foreign policy destroying their economy (once again) but before this, they were the main source of global financial instability (China, to their credit, is probably one of the only countries ever to rebalance from surplus to deficit country...Germany has done this multiple times over the years and has blamed other countries every time). Other countries using gold instead of US debt is good for both the US and those countries. Most of the "increase" has been due to gold rising in value and, fundamentally, it cannot solve the problem because the price cannot rise as much as it needs to but it should be part of a mix with SDRs and other securities.

the_gipsy 6mo ago
gibberish
- skippyboxedhero 6mo ago
  Nope, just economic history. People think the "new thing" is new...this has happened many times before. Macro tourists come in and think ten minutes with ChatGPT has turned them into an economist. Basic knowledge.
  - the_gipsy 5mo ago
    What's your point tho

cringleyrobert 6mo ago

Just make sure it’s real gold, not just a number on a spreadsheet, or a golden Twinkie made up of tungsten! India got caught with their heads in their asses with that one!

CGMthrowaway 6mo ago

Scott Bessent is literally the guy who broke the pound, I think he understands

deleted 6mo ago

[deleted]