American Economics Thread


emblem21

Junior Member
Registered Member
In theory yes as the US govt debt is in its currency (USD), unlike most other countries (i.e Mexico debt is in USD currency, not in its currency). So YES, just print USD to pay its debt in USD ... thats the theory, in reality, thats would be the last resort as once the US govt start doing it, basically nobody would trust the USD/US Govt anymore
Yeah, that is why other countries are decreasing the USA treasury holdings as by printing money and trying to use that to pay the debt off isn’t going to gel. Hence if the USA ends up going to inflation (and soon hyperinflation given how everyday goods are sky rocketing in price right now), well the USA is going to be in a lot of trouble as sooner or later, trying to fund a war without dollars going to be near impossible. Well not when the everyday people (90% of them) are going to be literally tearing the nation apart for supplies that cannot be bought overseas because the dollar is worth nothing by that point. Also this is a problem made worse by the pandemic meaning that right now the dollar in theory can last for ever if the print machine runs forever, but reality is going to be quite different is every sense of the word
 

localizer

Colonel
Registered Member
In 1980 US debt was around 900 billion on a 2.8 trillion GDP. ~30%

To fix inflation Paul Volcker increased interest rates to 20% and the economy crashed to hell bringing unemployment to 20%
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Imagine paying 20% on $30-$40 trillion of debt with a $20 trillion GDP.


You would have to tax half the GDP just to keep the government running and paying interest. Forget about paying off the debt.
 

nugroho

Junior Member
In theory yes as the US govt debt is in its currency (USD), unlike most other countries (i.e Mexico debt is in USD currency, not in its currency). So YES, just print USD to pay its debt in USD ... thats the theory, in reality, thats would be the last resort as once the US govt start doing it, basically nobody would trust the USD/US Govt anymore
Agree, but the question is how many trillions more USD can be printed till mayority of the financial world begin to distrust USD? 10, 20, or maybe 30 trillions?
 

horse

Junior Member
Registered Member
Agree, but the question is how many trillions more USD can be printed till mayority of the financial world begin to distrust USD? 10, 20, or maybe 30 trillions?
Oh, the answer to that is simple.

We just all watch the price of gold, commodities, and the price of the USD.

This is a rare moment in history. No one should be short anything, including USD of all ironies.

All the money printing will devalue the currency, except for the Chinese RMB.

However, the money printing and debt will create Greek style crisis, which makes money flow into the USD, therefore, maybe not a good idea to be short USD, but the better idea is to be long RMB.

Hope that make sense.

If paper money becomes worthless, then real assets retain their value as that becomes the store of value.
 

siegecrossbow

Brigadier
Staff member
Super Moderator
Well. Good luck with that!

Pete Buttigieg: I want the United States to be leading the world in high speed rail

Secretary of Transportation Pete Buttigieg joins The ReidOut to talk about the future of high speed rail in the United States and having racially equitable transportation policy.Feb. 5, 2021

Here's the link.

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Problem is institutional and can’t be easily solved by slogan shouting.
 

gelgoog

Captain
Registered Member
Land acquisition to build highspeed rail in the US is extremely expensive. That's why they started building that line in California in the middle of nowhere. This means it is unlikely the US will ever build much of it.
 

SilentObserver

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Nevada is planning on establishing business areas that allow businesses to set up government functions separate from local governments. These "innovation zones" are an interesting experiment into anarcho capitalism, like in cyberpunk 2077. Business entities would be allowed to impose taxes, form school districts and courts and provide government services.

Under current American constitution, there is a legal loophole for slavery. 13th amendment: "Neither slavery nor involuntary servitude, except as a punishment for crime where of the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
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Currently this is exploited by private prison labour corporations like CoreCivic, it's publically traded & dividend paying (good for your retirement fund). They are incentivized to increase the prison population, could be related to why America has the largest incarcerated population in the world at 2 million people. Prison labour is used to generate profit and funding is provided by the government as well. Euphemism for the American Gulag (although they would demonize other nations for having a similar system).

Would be interesting to see how private enterprise would exploit legalized slavery in a system where they run the government/courts as well. It is my assumption that incentives are towards profit and productivity, resulting in higher efficiency and heavy neglect towards less productive areas that we normally take for granted. Much like the market based American health care system, we see extreme exploitation of the average user but provides great funding to develop high end medicine, I expect similar to be the case with this experiment.

Lens of traditional morality might be insufficient in tackling the challenges of the future. Better have an isolated experiment, monitor its progress and learn lessons from it than commit to a radical concept for the entire society similar to Shenzhen and other SEZs. For better or for worse, if implemented this will be an social-economic experiment worth looking into.
 
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antiterror13

Brigadier
Agree, but the question is how many trillions more USD can be printed till mayority of the financial world begin to distrust USD? 10, 20, or maybe 30 trillions?

The key is the US has the strongest military in the world, by far and they can reach anybody anywhere. You see my point? Thats why even having a huge deficit the spending of defence keep rising
 

steel21

Junior Member
Registered Member
The key is the US has the strongest military in the world, by far and they can reach anybody anywhere. You see my point? Thats why even having a huge deficit the spending of defence keep rising
But that military is not free.

It depends on large part on deficit spending.

Without a prosperous tax base to substantiate return on bonds, there will be less and less international lending to support that deficit spending.

This will lead to a spiraling in debt servicing and interest rates as well as decreasing purchasing power of the dollar.

If the trend is not corrected, it will be a case of "the bigger they are, the harder they fall", as the hulking mass will necessitate greater and greater sunk expenditure to uphold rather than spending on long term investments like education and infrastructure.
 

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