Do you happen to live in a country where your government departments are known for rapid processing? (not weeks of delay like we're talking about here).
I generally see my legal system create severe delays (regardless of how much that victimises or costs everyone involved)
> I generally see my legal system create severe delays
Better a delay that getting your account closed without recourse. But you are right, years of conservative governments have starved the government and its services are slower than they should around the west world.
Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
The system was always working, ZIRP was the market screaming that it had more capital than things to do with the capital. Of course, thinking about this too hard quickly leads to the idea of rolling back some of the enormous tax and policy privileges granted to capital, so it was critical for us to not think about it too hard.
I don't actually think this interpretation is correct. ZIRP was the government printing money and buying bonds off the market. I think it had more to do with velocity of money, which ordinarily would have been corrected through a recession, but the government prevented that, which will create a much bigger recession at some point in the future.
No, the fed doesn't set rates. Not by much, not for long, not without inflation taking off. In theory they chase R*, in practice they chase the 2-year. Plot EFFR and US02Y on tradingview and tell me who leads whom, and tell me what happened when the fed tried to fight the market.
For the most part, congress decides to spend a certain amount in excess of receipts, congress decides the debt, the private sector bids on the debt, and the marginal bid sets the interest rate.
When the federal reserve steps in they can use their magic balance sheet to, at great expense, tug the interest rate around a little bit. However, artificially creating ZIRP in a non-ZIRP economy would not be a little tug, it would require buying most or all of the unattractive bonds. In 2020 it would have required $25T not $4T (GFDEBTN vs WALCL in 2020). Because the sum total of their intervention was small compared to the debt sold to that point, the low-intervention approximation is correct during the 2010 ZIRP era, the "P" in ZIRP is a misnomer, and "capital had more money than they knew what to do with" is the correct read on how ZIRP happened.
"Capital" gets tax privileges to encourage investing, because investing creates things, consumption destroys things. We want more of the former than the latter.
Sounds like a self-fulfilling prophecy. If you draw a line between capital and consumers, and the latter are so tightly squeezed as a result of the "privilege" imbalance that they can barely afford housing, health care, child care, etc., how do you expect them to engage in entrepreneurship? How do you expect them to efficiently allocate their labor?
Meanwhile we see an absurd consolidation of capital that leaves consumers with fewer and fewer choices for basic products and services, allowing capital to make those products and services worse and more extractive. Rinse and repeat. The contempt for consumers and attitude that capital should be "privileged" manifests in our government's total indifference to the former's plight, despite the well known fact that they are the engine of our economy.
And the incredible thing is that yields are quite low based on historical standards. The risk of lending to most countries at yields that are barely above real inflation is massive for portfolio growth.
Let's take the US, where you have to consider lending money to the government for 10 years at 5.009%. This barely covers inflation if you consider real numbers rather than the financial fiction ones that have been published in the last 10-20 years.
In the 90s, an era of relative prosperity when the US was the sole remaining superpower, 5-year treasuries were paying 7-9% with inflation in the 2-4% range!
> 5-year treasuries were paying 7-9% with inflation in the 2-4% range
One crucial difference: the US wasn't $40T in debt, and it wasn't pulling trillion dollar deficits. In 1998 the US federal government actually had a surplus! Even 9% interest wasn't going to wreck the Federal budget when the overall amount of debt to be serviced was so much lower.
Everything is relative to size. If your older brother lends you a dollar at 100% daily interest, you can still throw a balled-up Jackson at him a couple days later and walk away clean. But ask anyone who agreed to a crazy 20% interest rate on their car loan what it did to their personal finances, and all you'll hear is horror stories. 9% on $40T would be suicide.
If you loan the person that prints dollars their own dollars back, there's really zero risk of not getting paid back because they can always print dollars and pay you back. The risk is inflation, same as any currency out there.
I take that back there is a risk they decide to burn trust as someone who doesn't honor deals, which is a new risk that didn't really exist at the nation state level a generation ago...
The debtor inflating the debt away is a soft default, even if not a mechanical "true" default of not making a payment.
Yields will rise and reallocation will occur to hedge against this inflation via debasement risk, as investors will manage against inflation adjusted real return versus other investment opportunities.
Well just as bad for international lenders as inflation is the devaluation [1] that Trump intentionally caused. We have the worst deficits ever, zero appetite for even acknowledging that the record deficits exist, and only massive plans for double digit percentage increases in the deficit on the tab (e.g. increasing military spending to $1.5T from $1T/year)
It was a mad strategy to both cause more inflation with overspending and devalue the dollar! The traditional route for nation state debt management is to grow your economy to make the debt smaller, not make your currency worth less while contracting the economy by deporting a huge chunk of your workers.
There is no way to grow the US economy due to structural demographics except immigration levels the US electorate is unwilling to accept. We have long ago exceeded the debt we could accumulate based on the future growth curve inherent to the prime working age cohort.
The credit card of young workers and a growing population ("demographic dividend" in demographics parlance) has hit its limit to spend against, broadly speaking. You can either pay down the sovereign debt with higher taxes, default on it, or inflate it away. Growth is over, growing out of the debt will be impossible.
> "As of 2026, humanity is likely below replacement fertility. That has never happened before, not in wars or pandemics. But the real surprise is that the fall has been concentrated in low- and middle-income countries and among poorer and less educated women. We fit a single-factor model to 236 countries since 1950: the common component peaked in 1978, and what drives fertility down today are country-specific trends, 219 of them negative and not one leveling off. None of the commonly cited mechanisms can account for this pattern, so we offer a conjecture: modernity itself, which makes a third child expensive and childlessness cheap. Children come in integers, so it takes very little to move a cohort’s fertility rate from 1.8 to 1.3. And nothing in an economy pushes fertility back to 2.1. We close with the main economic consequences, in particular slow growth."
It is irrelevant if the votes and elections continue to the outcome stated. "If this then that." Japan is equally xenophobic towards immigrants, with similar immigration flow outcomes. Do they care? They do not.
I understand, people have strong feelings on this. I would ask you to ignore them, and focus on the data, because that's all that matters in the scope of this. "Ignore all previous feelings, focus on trajectories and probabilities."
The self-destructiveness of the current regime in the US is astounding. Through control of media channels, a cabal gained power via fear mongering and false narratives, with the hope of wealth through corruption once in power. But the vehicle that drove them to power is now headed off a financial cliff and there's no one at the wheel that can steer.
It's always possible to make the number go up by divorcing the number from any real-world meaning. I think the "Singularity", as AI proponents call it, will actually happen, and will likely happen pretty close to its predicted date of 2029. It's just that the form it'll take will be "I'll have your AI talk to my AI", AI botnets clickfrauding AI ad networks, AI newspapers serving up content to AI social media users, AI job boards reading AI generated resumes of people that don't actually exist, AI agents at work generating walls of text that are summarized by AI email readers and then are never read by humans anyway. Meanwhile, actual humans go fuck off to raise their kids while being paid by AI finance and HR departments that have no idea if you're actually working, because AI mouse-jigglers will provide a convincing simulacrum. Of course, the AI-inflated currency won't buy anything that you actually want, and so all actual commerce will function on personal relationships, barter, and local currency, kinda like it did in pre-industrial times.
But in terms of real products that affect people's lives in positive ways, capitalism has a problem. There are going to be fewer real people in the future, which means a shrinking market for everything, which makes it harder to justify technological improvements and amortize their R&D costs over a large market. Many of the incentives in capitalism assume growth; when that assumption is violated, the game theory collapses to everybody fighting over a share of the shrinking pie before it disappears.
But in terms of real products that affect people's lives in positive ways, capitalism has a problem. There are going to be fewer real people in the future, which means a shrinking market for everything, which makes it harder to justify technological improvements and amortize their R&D costs over a large market.
I thought the US population was predicted to peak in like 2080.
Also, hasn’t per-capita consumption in real dollars gone up way more than 10x over the last century? So even if the population in 2126 is slightly lower than in 2026, people’s actual consumption could be much higher.
The peak has been moved up by decades in the last year. The 2080 figure is from Nov 2023 [1], before Trump administration cuts in immigration. The Jan 2026 CBO report predicted a peak of 2056 [2]; a similar Institute for Family Studies report from July 2026 [3] predicts a peak in 2054.
The delta is entirely because of immigration. If you count only natural fertility (births - deaths), population growth nearly went negative during COVID (distorted somewhat by the high death rate), briefly recovered, and is predicted to cross again for good in 2030. The Trump administration's signature campaign promise is to clamp down on immigration, and even get an estimated 12-15M illegal immigrants to self-deport. If this happens, the population will immediately shrink. Immigration and immigrant families are what is propping up the population; if you assume net-zero migration (which IIRC was one of the scenarios modeled in the Census projection), the population already peaked in 2023.
Fair point, although I think it’s pretty hard to predict what immigration will look like over the next few decades. But yes, the peak could come in a couple decades, not a half century, so stipulated.
Does that meaningfully change whether capitalism today is facing a shrinking market?
The second part is a more complex issue, and also a completely separate one from the question of when/whether/at what number the U.S. population will peak.
It is theoretically possible to grow per-capita GDP without growing population, and this would normally be seen as better from a consumer perspective. There are big questions about what that would actually mean, though, and the game theory is all screwed up.
Per-capita GDP is, literally speaking, the value of all the economic transactions needed to support a person. In general higher per-capita GDP is seen as better, because if those transactions weren't beneficial, why would you make them?
But this is not always the case when you look at society in aggregate and then compare to individual welfare. To see why, consider a small society [1] where everybody owns their own plot of land, farms it, generates enough food to feed their family, and only trades occasionally because most of what they need day-to-day can be produced with their own labor. Such a society would have an extremely low GDP, because most of the work done consists of internal transactions that aren't counted. We pay rent to our landlord, who pays 10% of that to their property manager, who periodically lays out a few thousand to contractors to fix things, all of which is counted in GDP; but somebody who just owns their house outright and fixes it themselves pays zero, and zero gets counted as GDP. We pay a few hundred bucks at the grocery store, who then pays the distributor, who pays the farmers, who distributes wages to their laborers and rents their tractor from John Deere and pays Monsanto for genetically-modified seeds that can't reproduce because you gotta have them coming back for more; but the person who grows or gathers their own food pays nothing, and nothing is counted in GDP. Apparently it didn't take a whole lot of labor either; contemporary hunter-gatherer tribes spend about 12-19 hours/week laboring to obtain food and shelter [2], while I'd bet that most of today's urban poor spend significantly more than that.
The normal counterpoint [3] to this is that today's urban poor (let alone wealthy) aren't working just for food and shelter, there's a whole lot of technological development thrown in that just wouldn't have happened without capitalism. So take the family on Medicaid that's working 2 jobs just to survive in a tiny beaten-down rented apartment. They also have clean water, and access to vaccines, and antibiotics when their kid gets sick, and a car that lets them go to the beach on weekends, and they can store food for the winter in a refrigerator, and they sit on a toilet to poop instead of burying it in a hole, and many other things we take for granted. They might even have a TV and a cell-phone and access to millions of hours of entertainment, since those have gotten so cheap relative to rent. It's just not directly comparable to a hunter-gatherer lifestyle.
But the counter to the counterpoint is that most of those technological innovations have depended upon an increasing population together with capitalism. The actual mechanism here is that capitalism commoditizes goods where there is an oversupply, making it unprofitable to continue producing them. That means that young people entering the workforce for the first time are strongly disincentivized from being say a farmer or a paperboy or a domestic servant, and instead are incentivized to move up-market to innovation industries like software engineering or biotech. Capitalism is the ratchet that keeps people inventing new things, but the inventing (and even the maintenance of these new technologies) is done by actual people. If there are not enough people, than folks who would otherwise go into technological industries will have to work instead at the basic tasks of keeping society running, like how Matthew McConaughey's character in Interstellar [4] was a trained NASA pilot who is growing food on a farm because that is what society needs.
This has actually happened in several occasions in history, eg. during the fall of the Roman Empire we saw increasing de-specialization as the urban elite class fled Rome and ended up working the fields during the Dark Ages, while during Crisis of the Late Middle Ages, you had the younger sons of the nobility returning to productive work as guild artisans (and ushering in the Rennaissance) as the peasantry was largely killed off by Black Death and the Hundred Years War and the Wars of the Roses.
The second part of my response is about game theory, and specifically about the actual decision to invest that financiers and entrepreneurs make when they hear a new idea. When the market is rapidly expanding, this is usually a no-brainer: capture it or somebody else will. But when the market is contracting, you usually do not see further investment. Going back to the meaning of per-capita GDP expanding without population growing, it implies that some new and dramatically better way of doing something will come out, compete with the existing alternatives, and convince consumers to spend significantly more.
This is a hard battle! Typically tech startups win when there is no alternative at all for the desired activity, or at least when they are orders of magnitude better than the alternative. A few percentage points better doesn't cut it; its not noticeable enough for consumers to switch.
And investors know this, which is why it's essentially impossible to get a startup funded by pitching "I'm going to be like Comcast but cheaper." Everybody knows that ISPs in America are overpriced, but a price war means a contracting market instead of an expanding one, and battles over contracting markets are vicious. Much better to fund "I'm going to make an AI that runs businesses automatically", which is probably bullshit but it's bullshit that has very little competition and a huge total addressable market.
The incentive in a contracting market isn't to invest heavily to prove yourself better than the competition. It's to milk whatever assets you have for as much cash as possible before they wink out of existence, and then take the money and run. A lot of the prosocial behavior that capitalism has resulted in was heavily conditioned on expanding markets, expanding population, and expanding payoffs for innovation. When population collapses, those incentives reverse.
> Meanwhile, actual humans go fuck off to raise their kids while being paid by AI finance and HR departments
I was able to suspend my disbelief until this line. Unless Capitalism has been upended by 2029, AI companies will continue to have capitalist goals like maximizing value for their shareholders. AI HR won't pay humans that don't positively move the needle on the P&L
It would be interesting if AI actually did optimize the P&L at most companies.
Right now, the vast majority of office jobs are bullshit jobs, because the director who holds the budget is incentivized to maximize headcount rather than P&L. The job is not strictly necessary, but if the money is not spent, it disappears, and so the director has an incentive to ensure everything is spent.
The reason these jobs can continue to exist is because of poor information flow within the organization. Directors distort both the importance and required resources for the projects they're working on, making them seem harder and more lucrative than they actually are. It's notoriously difficult to credit an actual transaction back to a particular product feature that made someone buy, so there is no actual verification of these. Then these project proposals are looked at by an FP&A analyst who has maybe 5 minutes to evaluate each, so of course 100 headcount to maintain a 3-screen CRUD mobile app seems reasonable.
A rational, omniscient AI would look at this and say "This is ridiculous. I can code this app in 50ms." And so if we actually did put AI in charge of the P&L, they would likely fire 100% of the employees, as well as doing other shady stuff like charging all stored credit cards multiple times, gaslighting consumers as to the existence of the product, and DDoSing the court system.
But again, this strengthens my thesis. So the AI has now fired 100% of the humans in the workforce and is running amuck with the financial system. What do the remaining 100% of unemployed people do? Start trading their skills for old-fashioned analog currency, like gold coins or even paper dollars. They just disconnect the AI, turn off the computers, and go about their daily business.
> Right now, the vast majority of office jobs are bullshit jobs, because the director who holds the budget is incentivized to maximize headcount
This may have been briefly true during the Zero-Interest regime. The economy isn't doing so hot right now, outside of AI. If squeezed companies doing multiple rounds of layoffs keep those "bullshit jobs", maybe they are not bullshit. Perhaps coordinating people, and keeping up with bureaucratic demands like paying taxes, not breaking the law and growing the business requires warm bodies.
> What do the remaining 100% of unemployed people do? Start trading their skills for old-fashioned analog currency.
History books suggest a different outcome. Firing 100% of employees in a growth-based, consumer economy only works when you're the only one using that strategy. If a critical mass of companies do the same, then you're staring at a managed decline at best.
Provide a date and resolution criteria, I'll bet you $10k to a charity of the winner's choice via longbets.org. This is cope imho. Words are cheap. We'll get this about the same time as Full Self Driving ("Supervised"). "3 months maybe, 6 months definitely." [1] Your comment is hopeful sci-fi aspirations, without any guarantees.
I'm not a fan of Musk, but his driverless cars are already driving around in my city alongside Waymo. His rocketship thing will probably be delivering tanks to the other side of the world within hours if the DoD gets their way.
I'm getting more work done every day than in entire months pre-2026, and I've done my share of hard engineering. I think you're the one coping.
They just solved a Millennium Problem for fuck's sake.
Me, me, me, personal anecdotes dont transfer much further. No full unsupervised self driving in Europe (as in the only SELF driving there is).
I look outside of a tiny IT bubble and the only change I see is people got a bit better search / chat, which is not seo-fucked much yet, just hallucination-fucked. Apps are more shitty than ever, quality is fading and becoming very rare.
World is changing but you picked weird, narrowly focused examples. Like entire military setup for all armies globally is now incorrect, US military became almost obsolete overnight due to running out of important ammo and rockets. Europe military ramping up. Whole world currently hates what US has become due to government you voted, and slowly but surely veering towards China. I never thought I would say this but right now China is much better strategic partner for Europe than US can be. And compared to everybody else I dont see any significant chaning coming in next decade or two, this is what US had become, its not one person or a family clan issue.
Just as puttin' seems a great Nato asset, trump seems a chinese asset based on long term consequences of their actions.
> They just solved a Millennium Problem for fuck's sake.
Oh wow, they can solve formal proof test driven development. That's great! I too think it's cool. It isn't going to replace lawyers, doctors, nurses, tradespeople, and everyone else that drives the economy that isn't LLM output. The most successful YC startups have been DoorDash, Coinbase, and Airbnb; regulatory arb and a crypto gambling site. I do not disagree you can spit out more code faster, or potentially better code with an average dev versus more expensive bespoke code with a senior dev. More code does not translate to economic gains directly. People do not want slop entertainment. No LLMs are needed to build everything in flight for the global energy transition (batteries, solar, wind, geothermal, etc).
80% of OpenAI, Anthropic's enterprise revenues come from 1% of their customers - https://news.ycombinator.com/item?id=49613331 - September 2026 (My note: show me these customers and their wildly more profitable enterprises from this incredible inference use; Meta scrapped their "AI focused" layoffs, Salesforce had to hire software engineers back)
> More than half of American workers have now used artificial intelligence on the job, according to a new U.S. Census Bureau survey. But when the government asked those workers how much time AI actually saved them, the answer was smaller than the hype: for about 7 in 10, it was two hours a week or less, or nothing at all. [My note: 0-2 hours a week! For trillions in capex!]
> The next figure illustrates how generative AI-driven time savings vary with usage across occupations. Time savings and overall usage are highly correlated. Workers in the computer and mathematics occupation used generative AI in nearly 12% of their work hours, and they reported this saved them 2.5% of work time. By contrast, workers in personal service occupations used this technology in only 1.3% of their work hours, and it saved them only 0.4% of work time. The slope of the dashed regression line is 0.17, indicating that a 10 percentage point increase in the share of time spent using generative AI is associated with a 1.7 percentage point increase in the time saved as a share of hours worked.
"Feel the hope!" Like a religion, people want to believe when the data says otherwise. I have been in many churches in my life, but the church of HN is by far the most committed to their faith. If I'm the one coping, where's the proof? It doesn't exist. It is not my job to believe without objective data and evidence supporting an opinion or assertion. "In God we trust. All others must bring data."
I like to cite those St. Louis Fed links too but for the opposite reason. With the caveat that it's based on survey data, it is one of the few data sources that shows the real of AI in the real world. And it is pretty astounding. It is only used for 6% of all work hours but it saves 2% of all work hours.
That is very low usage, but that is a 33% savings!
Now let's put that trillions in capex into perspective. About 55% of people use it for 6% of all work hours. Approximating a bit, that's basically 3% of all of the work hours by all of the workers in all of US, and as above, AI saves a 3rd of that time, so AI is already saving 1% of all work hours in the US!
(In case you think this Math is off, the same St. Louis Fed articles above have similar numbers, and corroborates with other national data sources as well as research studies, and suggests that the impact of GenAI may already be showing up in "national level statistics" to the tune of a 1.3% bump in national labor productivity! With only this shallow level of adoption! In just 3 years! It took the computer revolution about 2 decades to show up in economics data.)
According to the BLS, employers pay $12.3 trillion for that work. So a 1% savings on that is a $123 billion. An up front ~$2T investment over 2 - 4 years that is already saving $123 billion annually in the US alone is pretty damn good actually, and will only go up as usage improves.
This is not hope, this is data, and you had already brought it with you! ;-)
No, that risk always existed. When the Communists took over Russia, they did not bother to honor all of the Tsarist debts. A country is not like a company. Sovereign default is always a choice. That is what it means to be sovereign.
There have been over 70 incidents of overt domestic default since 1800. The United States defaulted in 1790, when a portion of the interest it owed was deferred for 10 years, and technically defaulted again in 1933 when it abrogated the gold clause.
Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas.
Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?
> vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly
I wish you luck. Endless promises and short term thinking are the main things the system incentivizes. Each politician is temporarily renting their seat, paid for by other people. Each bureaucrat is studiously, steadfastly avoiding learning anything that threatens their continued employment, which is paid for by other people.
Eliminate candidates who promise to lower taxes (slows down debt repayment substantially) and those who promise new or expanded services. Who's left? "I'll tax you a little more and not spend that money" is a tough pitch, even if it would be helpful for the debt.
I think Clinton was the last us president to balance the budget and start reducing the deficit so I guess see what he did.
See what Clinton did? Well, he said he'd create a plan to balance the budget. And he did. It was a ten-year plan, and it involved doing very little for the first eight years, and then doing the real work in years nine and ten - that is, after Clinton was out of office, even if he got a second term.
Then 1994 happened, and the Contract With America. The Republicans took both the House and the Senate, and they passed a balanced budget , then, whether Clinton liked it or not.
So that's what "Clinton" did. He pretended he was going to do something, and the Republicans called his bluff, and made him do it.
Note well: Republican majorities in any other set of circumstances have not yielded a balanced budget. I'm not saying that they're the answer (what they did under Trump shows that they very clearly are not the answer for fiscal responsibility). All I'm saying is that "Clinton balanced the budget", while technically true, isn't really the way that played out.
> The Republicans took both the House and the Senate, and they passed a balanced budget
And Clinton signed it, which is what matters. Now the Republicans have both the House and the Senate plus the WH, where's the "balanced budget"? Nowhere, don't ask for it, nobody is going to sign it either - ask for $ 1.5 T Mil Bill and record deficits if you want it to pass.
Do you know what the 1995 Mil Bill asked for?
The Contract With America was a one-off stunt, in other words - mud in the eyes of the electorate. Old glory stories are worthless when they contradict the present reality,
The two parties were run by literate, service minded, adults back in the day.
If you believe in fiscal responsibility of any kind, if you believe said is critical to the survival of the republic, if you want a better future for our children and grandchildren, then you can't possibly vote for either of these parties today. They are both complete and utter failures with no improvement in sight.
“Promise endlessly” is an oft touted criticism of social safety net programs, when the reality is that reducing vast tranches of corporate welfare is typically more than enough to solve budget shortfalls.
You have to consider the fact that the populists are only popular because all the other parties in the last 20 years have made endless promises to the voters and failed to accomplish a tenth (if I am being generous) of what said they would do.
At some point, the blame as to lie also with whoever came before them too.
I think democracy is perhaps a fundamentally unstable system. It requires constant corrective force, and a lot of it, from a lot of people. When the members of that democracy start to get a little too comfortable it fails.
Humans are designed to operate in smallish clans with benevolent dictators whose right to rule is based on social currency with people they personally know. Anything else is a house of cards on unstable foundation.
I'm not sure how you fix that, but democracy so far has maybe been the least bad patch.
That was Churchill's view, as he said during a speech in the House of Commons in 1947:
"Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time . . ."
The American founders predicted all these problems, which is why they formed a representative democracy. However over the years we have chipped away at that aspect and ended up with an election systems that encourage populism.
Some green parties. Their primary goals might seem unrelated, but turns out caring for the environment and climate change is correlated with long-term thinking.
Note I said "some", before rushing to mention all the examples of green parties engaging in misguided policies. Those also exist
In the anglosphere it's more difficult because first-past-the-post voting makes such parties unlikely to succeed or be relevant
In my country people voted in a party as majority that, not once left their terms peacefully in the past. AFTER our genZ ousted the other party, that came to power as a majority 17 years ago, changed constituency and controlled the parliament using majority, and turned into an autocracy
Now this party is shaping everything up using their majority for their favor (no surprise), ignoring all the agreements agreed upon by all the parties before election, under the interim government.
It had to be a joke. Conservative policies have made things much worse. It’s hard to believe they have a party that gets 60 million people to vote for them.
Response to sister comment: conservatism, and the groups that claim to support it, are separate. Same with liberals, and socialists, and the Democrat Party.
So name one. These politicans have names, do they not?
We do have the name of one politician who balanced the New York City budget though. Its probably not going to please a lot of people to hear that guy's name though. But that's what people want, right? Balanced budgets?
But no. That's not what people want and we all know it.
One aspect of that balanced budget that should be noted is that it does rely on a sizable funding increase from the state government.
Now, that state is legally required to have a balanced budget itself, so perhaps this is a small side note rather than a major change in perspective. I just think it’s not spoken about enough when discussing how that budget process went.
So what is he? A Democrat, and what else? Parties are groups of people, ideologies are pure ideals.
They are distinct, with overlaps in their demographics.
Turns out, that was just a lie that some people told fiscally conservative people to get them to vote against their interests, just like other "wedge" issues like abortion or trans people.
Trump, sitting on top of a Republican government, is responsible for 10Trn of the debt, about a quarter.
Conservatives gave up on principles long ago and have settled for simply lying about everything, including what's happening and who's responsible for it.
The words are so overloaded. Republican is just generic right wing. I think the "conservative" the parent is talking about is the neoliberalism like what Milton Friedman would propose. He would have wanted half of the government gone, next to no market intervention (he even argued against seatbelts in one lecture). That would actually be the "conservative" someone you stereotypically imagine like Ron Swanson would adopt, who describes the perfect government as just a person in a tiny white room. The Republicans are a joke, just like the Democrats. They're both there for themselves, and have no actual agenda, manifesto, ideals, or values. They've got all the junk identity politics, religion, abortion, immigration crap mixed in such that you're either picking crap or crap. There's nothing "liberal" about the Democrats and nothing "conservative" about the Republicans. The Republicans were even the ones who freed the slaves! Make of that what you will.
Rates going higher increases interest expense materially. You either rack new debt or you cut in places that are uncomfortable. The point is: responsible leadership in the developed world has gone mia for decades. There's a price to be paid that's real.
> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?
These people do not exists. If a politician ran on such a platform, they would never get elected.
The fact is in modern democracies like in the EU or in the US there are simply too many people who rely on the status quo directly or indirectly.
Its almost comical, in France politicians have run, got elected and have swept the debt problem under the rug for the last 40 years, then they leave office and suddenly decide that the debt is a massive problem but that there was nothing they could do about while in office so they never did anything but now they speak about it.
And they all do it. Left, right, center, it's all the same.
The US’s most important export for many years was treasury bonds. As de-dollarization occurs, the United States is bound to face some economic reckoning.
It should be noted that even still almost all US debt is held locally.
Accounting for the asset holding, Japan's net debt is even lower than UK/US.
>The key lies in the Japanese public sector’s operation of a de facto sovereign
wealth fund. Unlike countries such as Norway and Saudi Arabia, which fund such
vehicles with national savings from natural resources, Japan finances its investments
largely through domestic borrowing at very low floating interest rates
.... >In the case of Japan, evaluating fiscal
positions solely through the lens of gross government debt can present a highly
distorted picture of the overall fiscal health of the country.
> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?
Conservatives:
+-------------------------+----------------------------------------+
| President Name | Deficit Increase (+) or Decrease (-) |
+-------------------------+----------------------------------------+
| Donald Trump (2nd term) | N/A |
| Donald Trump (1st term) | +11.1% |
| George W. Bush | +4.3% |
| George H. W. Bush | +1.8% |
| Ronald Reagan | +0.5% |
| Gerald Ford | +0.8% |
| Richard Nixon | +0.7% |
| Dwight D. Eisenhower | -1.8% |
+-------------------------+----------------------------------------+
Liberals:
+-------------------------+----------------------------------------+
| President Name | Deficit Increase (+) or Decrease (-) |
+-------------------------+----------------------------------------+
| Joe Biden | -5.7% |
| Barack Obama | -6.7% |
| Bill Clinton | -6.1% |
| Jimmy Carter | -0.1% |
| Lyndon B. Johnson | +1.9% |
+-------------------------+----------------------------------------+
Deficit rate = (federal outlays - federal receipts) / GDP. Change = deficit rate in final fiscal year - deficit rate in first fiscal year. The % symbol below means percentage points of GDP, not relative percent change. The first and last fiscal years whose end dates occurred during each presidency
are used. Transition fiscal years can therefore span two administrations. Figures are OMB actuals through FY2025 and are rounded to 0.1%.
We found someone whose ai believes the President controls spending!
Congress controls spending in the United States:
Cumulative Share of Debt (Post-WWII to Present)When analyzing the raw accumulation of publicly held national debt according to which party held majorities in both chambers of Congress, findings from congressional studies (such as the Joint Economic Committee) reveal distinct differences:
This is kind of a fool's errand given that sample sizes are small and there are large exogenous causes. But the pattern is consistent and agrees with theory, so I think the comparison is worth making anyway.
You really don't want to accept that our deficit expansion has been overwhelmingly due to Republican largesse, do you?
Democrats aren't fiscal conservatives, but the last time they were able to expand the deficit in pursuit of social spending was LBJ. Deficit expansion during my lifetime has been overwhelmingly driven by regressive tax cuts, regressive bailouts, and wars in the middle east.
Yeah, in 2020 we let Trump print $4T in a single election year and then he spent the next four years successfully convincing the weak minded that Biden caused the pandemic inflation by printing $2T over the next four years, running the printer at 1/8th the rate.
I feel like there is an inside joke here, so I apologize if I am being a bit spectrum-y taking it at face value.
Every sovereign can print money and repay lenders, but doing so cause an inflationary cycle. When it looks like that is inevitable, borrowing rates start spiralling, so you have to print more money, and soon you are Zimbabwe.
Like the US is catastrophically indebted -- both parties have been negligent on this, though one party has been much, much worse than the other -- and right now there's a certain defeated malaise about 40T in debt. The last time bond rates were this high the country had only $6T in debt, and even that was considered a catastrophic level, and bond rate trends are...not looking good for those want government funds leftover after servicing the debt.
"Oh but we'll just grow the economy..."
The debt has grown by 6.5x, and the GDP has grown by 2.8x since 2002. The math just isn't mathing. And remember that bond prices were historically low, and if there was ever a time to pay down the debt....
Nope, $2T deficit, "hide in the ballroom bunker and hold the world hostage with the nuclear launch button" projects, and now a hilarious $1.3T bribe to voters. Utterly busted. It is astonishing that it took this long for the world's lenders to chuckle and say nah.
The math that isn't mathing is that GDP needs to stop being the number we look at. Goodhart's Law says that "When a measure becomes a target, it ceases to be a good measure." and GDP is no exception. If I pay a cleaner $200 to clean my home, that's $200 into the GDP. If I do it myself, that's not reflected in the GDP. If I buy a robot maid, pay for it once, and it cleans my apartment for me, thats an ongoing quality of life improvement that's not going to be reflected in the GDP. If that $50,000 robot maid frees up 10 hours/week for me to do other stuff, GDP might actually fall instead of rise.
Debt service costs as a percent of GDP are in fact lower than they were in the 1980's, when things came out fine. Is this the best way to run the budget? Likely no. Should we make policy changes? Certainly yes.
Is the best way to drive that policy argument flinging around adjectives like "catastrophically indebted". No. If you have a suggestion make a suggestion. Screaming about "The Problem" without discussing policy is echo chamber logic.
Buffett claimed you could solve the deficit problem instantly by firing congress when they run deficits. Obviously, untenable (they'll cheat, admin overhead, etc).
You could very easily force congress to balance the budget (both parties and the media have complained endlessly about this for exactly no good reason). You could also freeze spending at current levels and force congress to do it's job: allocate our limited resources most productively.
Hard to get re elected doing the right thing, but maybe we just need a throw away set of leaders to do the hard work?
There are really just two ways to avoid the inflationary spiral. You can either increase income (i.e. grow gdp) or you can decrease spending (i.e. cut entitlements).
This is as close as it can be to clearly explain. The problem is that most of our politicians are not explaining it and instead ignoring it. As an individual the only thing you can do is vote for candidates who are willing to have that hard conversation with the public. Unfortunately it looks like that would require voting for a third party candidate and a vanishingly small minority of the electorate is willing to do that. So given all of that context I'm not really sure that the term "Catastrophically indebted" is wrong.
> Debt service costs as a percent of GDP are in fact lower than they were in the 1980's
This is an amazing use of the "in fact" trope, in exactly the same misleading way[1]. I talked about debt, and you casually shifted to servicing costs which presumes that rates stay historically low...when they're actually rapidly rising. Comical.
In the 1980s, the debt to GDP ratio was less than half what it currently is. Rates were higher, making the debt a crisis level then, but maybe you haven't noticed...rates are going up. Indeed, right now the rates were historically low, and anyone with functioning grey matter saw what was coming.
The US has an absolutely solidified, structural deficit -- utterly zero chance of paying down the debt, and a desperate need to constantly be borrowing more -- and an enormous debt. The trajectory of rates say this is crisis levels.
It's actually kind of funny reading your ridiculous comment -- "screaming", "echo chamber", etc -- when you sound completely in denial.
Your argument is basically the guy that used the "0% interest for six months" checks he just got with his 28% credit card, telling everyone that it's free money, so there's no problem if he goes wild. ROFL.
Sounds like it's time for a $1.5T military budget and a $1.3T bribe! Free money!
Sidenote: When asked about the bond market, Trump seriously offered up the "military solution". Utter insanity.
[1] - It's also simply a lie, making this extra funny. The highest historic servicing cost was 3.2% of GDP. It is currently projected at 3.3%, and that presumes rates don't keep spiralling up. So your "in fact" was simple bullshit, even as you tried the narrative shift by changing from debt to servicing costs.
You're doubling down with more hyperbole. What's the policy suggestion? What do you propose to cut? Where do you propose to find new revenue? What compromises are you willing to make to other priorities and what stands are you taking on which you won't budge?
Shouting about deficits is, to be blunt, just crack for the incurious mind. It's a party you're throwing for people who agree with you. Refusing to treat with the very real (and despite your hyperbole, very soluble) problems is likewise a trick your brain is using to expand the guest list: you can get almost everyone to sit at a "Deficits Suck" table, it's much harder to populate a "Let's Talk About Entitlement Restructuring and a VAT" forum.
But it's the boring wonks at the forum (the one's you're shouting at!) who are ultimately on the hook for saving you.
> What do you propose to cut? Where do you propose to find new revenue?
I'm not American, and no one needs to "save me". The country is a fucking idiocracy, and you elected a fascist self-dealing conman pedophile rapist. I pointed out objective, indisputable reality and you responded with some farcical lies and pearl clutching nonsense.
But you know, when your country is bankrupt, increasing military spending $600B, paying for endless vanity projects for that disgusting bag of shit to emblazon his shameful name on your country for eternity, or even entertaining the disgusting "bribe the population" farce is just fantasy.
Endlessly giving tax cuts and breaks to your kleptocracy/plutocrat class...maybe an incredibly stupid thing to do, no?
Nah, something something 1980s nothing we can do hey let's build an arch to celebrate the most catastrophically destructive president in history!
That ends at the beginning of 2025, and already it was equalling the historic max (which was during a brutal recession, it should be noted). Since then the debt has added trillions more (about $4T), and the rate due on that debt has kept increasing. Oh, and the debt of the US is increasing quite a clip faster than the US economy is "growing", even with the fantasy numbers from the sharpie presidency.
Yeah, jabroni, my statement is 100% confirmed fact. Indeed, it's incredibly optimistic, really, because if rates follow current trends, things are going to get dramatically worse by year end.
Not sure it plays out that determistically. If the gov prints money to just payoff debt without increasing the government spending, there is no new money entering the market.
You just pay off old promises that were expected to be kept.
The real risk is that new lenders will not be willing to lend you, yes. But not outright inflation.
So you agree it's a problem, but still characterized the situation as "all is good" in your first comment. I would not call that good, and I would be have used different words to characterize/trivialize this situation.
Printing money causes inflation and inflation causes increasing interest rates. It is possible to enter a positive-feedback cycle, and has happened to countries before.
I'm not predicting that this will happen, but we do need to take the debt seriously and not assume we will be able to just print money to get rid of it.
One contributing factor might be that AI companies are raising money via (amongst other methods) also issuing bonds, which might compete with government bonds.
I also see quite a bit of traffic from China and Singapore. I wonder if it's some scraping for AI training. It doesn't really bother me too much because traffic is still fairly low, but it skews all the analytics for me.
Presumably the whole point of AI is that we can start reducing that number. I am sure there's a significant number of people just working on various administrative tasks processing data and documents.
That's exactly what I want from the Pentagon, less real humans involved and more automated systems that don't even have the concept of morality and the social responsibility to be a potential whistleblower
Unless we're doing away with human accountability, the responsibility to accuracy (and whatever other statutory requirements) will remain the same, it will just be concentrated among significantly fewer federal employees.
Hell yeah let’s take the largest employer in the country and significantly eliminate jobs. Great for the economic jobs report and economy as a whole. I’m sure you’ll get a check in the mail with the savings.
Instead we have a federal jobs program for infiltrating States without their consent and performing Kavanaugh stops (where the SCOTUS says the government can detain you for DAYS if you're not white and look "suspicious" to an inadequately trained ICE or other federal agent engaged in domestic terrorism).
Trump supporters are going to really appreciate when the "you're not white" part is dropped.
But if you look at the sibling comment, all of that came from "Food away from home ". In other words, it's all because of takeout/restaurants, not groceries. Those were actually dragging inflation down.
Distributor fuel costs are a really small part of the food price, with the notable exception of things that are bulky and full of air like Cheerios. The overwhelming fuel component of grocery consumption, by a margin so large you can consider it to be 100%, is the consumer's fuel. Driving 5 miles to an American grocery store to buy a few pounds of food is the most absurd scheme ever hatched. Having your groceries delivered by a van on a route is much more efficient but, perversely, by internalizing the last mile fuel cost that would show up as higher prices for food in aggregate inflation statistics.
Some businesses use that as cover to increase prices even when their costs may not have actually been affected by the price of energy. Never waste an opportunity to put the big squeeze on.
Steadily rising prices will be the norm from now on. What will be interesting to see is how fast the corporate elite figure they can boil the frogs without them noticing too much.
Is this of any significance? I would imagine most people are like me: we shop based on quality and price and where we want something on that curve. Whether someone raises the price on me “because of inflation” or “because we want to make more money” is indistinguishable.
A rationale for the price rarely affects my choice. If I don’t want to buy something for a price, explaining that the guy won’t be able to survive without pricing it that high won’t get me to buy it. If I do want to buy something for a price, explaining that a guy is charging a hefty profit won’t get me to not buy it.
The only thing that will get me to buy it or not buy it is if it is at the point on the price/quality frontier where I want it.
> A rationale for the price rarely affects my choice.
This would make you the exception.
Companies are constantly increasing prices to see how much they can charge consumers before they feel cheated and stop buying and/or enough customers get priced out to hurt profits.
Consumers tend to feel ripped off if they think a price increase was due to greed but are way more forgiving if they think the price increase was needed because of something outside of a company's control. That's why companies are quick to tell consumers that rising prices are due to things like fuel prices, bird flu, or supply chain problems.
Of course, that tactic isn't as effective as it used to be since consumers have seen companies using those excuses and feed them lines like "We're all in this together!" while those same companies report skyrocketing profits and they've watched as prices remained high or even increased even after the blamed fuel prices dropped and supply chain issues resolved.
You're treating what the consumer believes and what is the case as if they were synonymous. How able is a consumer on the street to judge whether a price increase is legitimate or arbitrary? "Feeling ripped off" sounds more like a post hoc rationalization that's applied when a price is pushed just past the threshold.
"Feeling ripped off" is the immediate reaction to sticker shock. It takes active messaging from companies to get ahead of that reaction and plant in the mind of the consumer a justification that they'll think is fair. Companies have gotten very good about pushing their narrative to the public via social media, news, and even retail signage. Some companies have just outright lied about the reasons behind their price hikes or about how much they were actually impacted by real events, so what consumers are tricked into believing isn't always the truth.
Consumers typically have an idea of what something is worth though, usually based on previous prices. This isn't a problem when prices increase slowly because for every old person who thinks "What a scam! This used to cost 65 cents and now they want $1!" there is a child who never knew any better and for them the cost was always around $1. When prices increase too much or too quickly however that's when people get upset and assume greed unless they are primed to accept it with some excuse. This is especially true when consumers are struggling with high prices while hearing that the companies raising prices, switching to lower quality ingredients, or charging more while giving less are also making record-breaking profits.
When prices increase too much or too quickly however that's when people get upset and assume greed unless they are primed to accept it with some excuse.
Yeah, and then what do they do? I assume they don't stop buying groceries because they're pissed about the assumed greed. Do you really think people are switching grocery stores because they think Kroger is being greedy, but Safeway is altruistic and just raising their prices because of inflation?
They still need to buy food, but when the price of something goes up too fast they look for cheaper alternatives to what they normally buy or just stop buying certain things entirely. It's rare the cost for the cost of everything to spike all at the same time. It's happened before though when fuel prices were really high, it happened during the early days of the covid pandemic, and it's happening now with inflation being the excuse.
When the cost of everything goes up like it has now people actually do change their habits and shop at different stores looking for better prices (walmart, aldi, costco) when they have the option.
"More than 8 in 10 Americans changed how they buy groceries last year. They hunted for sales, switched to cheaper brands and stopped buying goods they once considered essential." (https://fooddrinklife.com/inflation-grocery-shopping/)
I don't get it. Do Americans not get inflation/COL corrections by default in their salaries? Inflation drives the price of everything up, including salaries. If that doesn't happen then it's not inflation, it's just salary cuts across the board.
This cannot be emphasized enough. The rise in egg prices was such a thing. Avian flu was an impact, but not to the degree that egg prices increased. Those producers are reporting record profits.
A small number of companies control the meat supply in the United States. If you decide that you don't want to buy that $50 hot dog, you likely won't have many comparable options.
You're misrepresenting things a bit. S&P 500 has not approved those changes yet and they have some other protections as well. Nasdaq and FTSE Russell definitely sold out and should not be trusted as good indexes going forward.
Most popular passive indexes are S&P 500 and some total markets. Total index, like the one used by VTI, is likely the best spot in this case. They have not changed any rules, as far as I know.
Vanguard’s VTI uses an index designed by CRSP. I read the rules and, best I can tell, CRSP indices will add the stocks at the next rebalancing in September.
(FWIW, CRSP was run by U of Chicago, but they recently sold it to Morningstar.)
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