Discussion Are Western Governments Bankrupt?

[cvh1991]

The USA has a worse Debt to GDP figure than we've had since World War II. The difference is that back then the massive costs subsided after the war ended. Today this is not the case.

When you look at the bulk of the cost its going towards:
1) Social Security / Welfare
2) Medicare / Medicaid
3) Military
4) *Other

And those first 2 appear to be the largest factors. I'm starting to think the social security system was very poorly thought out -- did nobody consider what happens to that system if the population starts to decline? I mean nobody? Suddenly you had 4 people working to support 1 retiree and then you have 2 people working to support 1 retiree, etc.

Though in fairness assuming the Social Security money that was paid into the system actually stayed saved and inflation was kept under control so it retained its value they should've been getting their own money back. But of course it didn't go that way at all.

The only options I see for the USA (and other western countries facing similar problems) are:
1) Lower interest rates and run that money printer to pay back debts on the cheap with new money you don't have -- this causes inflation
2) Default on the debt then actually change your governmental system such that politicians are no longer allowed to spend more than they take in
3) Massively cut spending -- that means probably all 3 of those items would need to be scaled back significantly.
4) Pump immigration numbers to try to get the ratio of workers to retirees under control -- this inflates the cost of housing, grinds the value of labor to dust, and creates a low trust society
5) Massively raise taxes on the rich and/or seize assets -- maybe a one-time wealth tax along with actually changing the system so that's it's truly only required once could work, but people aren't inert blocks of wood and the wealthy would be the first to know when moves like this were planned and they try to get all their money out of the system if hyper inflation happens or if the government tries to seize it.

I'm reminded of what the recent Argentina President said in his address: There isn't any money.

The unfortunate reality is that by continuing the borrow to pay off debt cycle this long it juts makes it worse and worse when the correction eventually comes. Modern Monetary Theory that governments love is complete horseshit:
View: https://www.youtube.com/watch?v=qSYlzxczAY4

 

[weaselbomber]

debt in economics is not necessarily a bad thing

 

[cvh1991]

Women by and large also vote wrong. Flat out, they vote wrong. They have no sense of nationalism or what is ruthlessly necessary to protect one's tribe.

They consistently vote left or they vote for whoever will give them legal abortion even if that party is feeding them obvious lies about what we're able to realistically afford.

They think money just falls from the fucking sky I swear. "Just tax the rich people" they've tried historically many times and ironically it tends to reduce tax intakes (see Thomas Sowell books on the subject). This is because the rich simply don't pay, they move their money such that they side step the new taxes. Closing the loopholes maybe could be done, but it hasn't been yet.

 

[cvh1991]

debt in economics is not necessarily a bad thing

It depends -- a debt that is sustained forever that is growing forever is really bad.

Overtime especially in a high interest rate environment environment more and more of the tax revenue intake goes towards the debt instead of actual services.

The right way to handle debt is short term debt or debt that is going towards things that will increase revenue/jobs down the road since that's more like an investment in your society. The history of debt in the USA is an odd one because it's like they just totally stopped caring and fully embraced MMT in recent years.

Eventually we have to deal with it somehow.

 

[ethniccel1]

What is debt though in terms of state debt? Who lends the government the money

 

[cvh1991]

What is debt though in terms of state debt? Who lends the government the money

People buy bonds usually -- it is true that the government owes largely to its own citizens. A lot of times though they just print it out of thin air to cover the deficit which devalues everyone's savings.

 

[ethniccel1]

People buy bonds usually -- it is true that the government owes largely to its own citizens. A lot of times though they just print it out of thin air to cover the deficit which devalues everyone's savings.

Okay I think I get it. The government sells what are called bonds and recieves cash for them. This obviously is free of inflation because no new cash was printed.

is a bond like an "I owe you thingy"?

 

[cvh1991]

is a bond like an "I owe you thingy"?

Yes, bonds have maturity and a yield. Corporations also have bonds actually but those are seen as a bit higher risk since default can occur more often than with governments (who can just print the money if they don’t have it although that would cause inflation and devalue the payment being made ironically).

 

[ethniccel1]

Yes, bonds have maturity and a yield. Corporations also have bonds actually but those are seen as a bit higher risk since default can occur more often than with governments (who can just print the money if they don’t have it although that would cause inflation and devalue the payment being made ironically).

ok now i understand a little better why governments print money. Say they need to pay a mature bond, plus fund the Ukraine war, plus pay for some commitments say to the Saudis to keep that sweet oil flowing in Americas direction. Then just print money.

 

[PurgatoryPass]

The federal reserve prints money. The only thing that matters is the believe system around the money.

 

[ethniccel1]

And to answer your question: Yes Western governments are bankrupt. The current American Empire as we know is slowly crumbling. It has 10-20 years still as the super power and then it go the way of the Roman Empire, the British Empire, the Ottoman Empire, the USSR. It seems we are heading back to the pre WW2 order before USA opened up the seas to all for globalisation by protecting the sea passages against pirates and aggressive foreign navies.

USA will still be waelthy because they got everything in one country, excellent agriculture, vast mineral resources in its own ground, vast tracts of unsettled land. Its the Europeans that will be forced to band together and invade/colonise places like Venezuala, Congo to suck that sweet petrolium oil and cobalt etc etc.

Gen Alpha and the Zoomers will live through interesting times indeed

 

[cvh1991]

The federal reserve prints money. The only thing that matters is the believe system around the money.

Except running the money printer is effectively an invisible tax on people’s savings because it devalues their money. This can have a delayed effect depending on where the printed money goes. This kind of thing has been beaten to death by people like Milton Friedman for ages and prior now.

What matters is production and services, if those stay the same while the money supply is increased you get inflation. Whoever gets the money first benefits most since they get to spend it on yesterday’s prices. Alternatively you could have no expansion of the money supply but if production and services go down you might still see an increase in prices as there are now too few goods to meet demand, that kinda thing.

In the American Civil War the South printed tons of money so inflation was nuts. When the north overran that area they couldn’t print more for awhile and there wasn’t any inflation during that period.

Inflation basically fucks over the poor and is a weird round about wealth transfer to the rich because the rich hold assets that more gracefully scale in value when more money is printed but the working poor usually don’t. If the inflation rate exceeds the savings interest rate you can get you are actively losing money constantly.

Some times debt is worth it, but other times the government is just overspending way too much money with no plan to balance the budget and the debt snowballs like it has now. And the politicians don’t want to fix it because they see it as career suicide. Yet in Argentina part of why they elected who they did was because he was honest about their being no money, the horrible inflationary situation, and the reality that to fix it would mean a lot of short term pain. I respect that kind of honesty a lot from a politician I can’t remember the last time I saw an address like that in the US.

 

[cvh1991]

And to answer your question: Yes Western governments are bankrupt. The current American Empire as we know is slowly crumbling. It has 10-20 years still as the super power and then it go the way of the Roman Empire, the British Empire, the Ottoman Empire, the USSR. It seems we are heading back to the pre WW2 order before USA opened up the seas to all for globalisation by protecting the sea passages against pirates and aggressive foreign navies.

USA will still be waelthy because they got everything in one country, excellent agriculture, vast mineral resources in its own ground, vast tracts of unsettled land. Its the Europeans that will be forced to band together and invade/colonise places like Venezuala, Congo to suck that sweet petrolium oil and cobalt etc etc.

Gen Alpha and the Zoomers will live through interesting times indeed

Yeah, a lot of people are speculating that the current empire cycle is starting to wind down and that war is on the horizon.

It’s sad of course that to fix the rot so much suffering has to be lived to get there but at the same time I’m very tired of living in a world of nihilism and hedonism where nobody trusts each other, everyone is poor, and people like me are effectively punching bag second class citizens who will never have any of the things that matter like my own home or a family.

A society like that deserved to be torn to shreds by its own people and hopefully whatever comes after will be better than what came before.

People think I’m insane for thinking this but having some “nice toys” and technology where everything decent in your life dependent on awful working conditions where you can lose it all in the blink of an eye is not a good way to live. And nice toys and technology don’t matter your own family, a home, community, and a decent job are what matter.

Of course in war or any bad times it is men who bare the greatest burden. Low status poor men always die en masse. If another world war or civil war happens it’s us who will have our lives wrecked but hey my life already sucks and maybe a better world for young men can come out of it. I hope feminism and woke ideology is destroyed with an iron fist and that nobody lets those people anywhere near institutions or education or even social media ever fucking again. Women need to be put back in their role as mothers, they’ve become spoiled, entitled, outright delusional, they look down on almost all men, they refuse en masse to mother children anymore, and all the while the system allows them to avoid any accountability. Women in western countries have no conception of what it’s like to be truly alone and have no one care about you and when the war comes it’s us who will die in the mud not them.

 

[RandomGuy]

View: https://youtube.com/shorts/oHc5oGBXgWg?si=LP9bo0WL58DEqsF4

 

[cvh1991]

View: https://youtube.com/shorts/oHc5oGBXgWg?si=LP9bo0WL58DEqsF4

That guys video on the cycle of empires is interesting.

 

[ethniccel1]

The US sold all their farmland to china and they wont drill for oil. Its completely over. All of those resources and the government still managed to lose everything.

they got an empire to keep afloat, it costs money to be numbe1. Empires come and go and now the West is in decline, they rise again but for now they going to shit