Another factor in that case was that the government regulated, in some cases, the ratings of bonds that entities were allowed to buy (they couldn't be as highly levered with lower rated bonds) and so there was an incentive for bond ratings to be falsely inflated, happily carried out by the rating agencies. Of course collateralized junk is still junk, and many people at the time knew that, but there was money to be made in looking the other way.
This would be incredibly hard to test because you'd have to have the results of the study and then wait a few decades to see who ends up identifying as transgender. Also the amount of transgender people is a small fraction of the population so you'd need a larger total sample size for the same statistical significance.
My experience interacting with transgender people is that transgender men and cisgender women have a lot of things in common and visa versa, so I would expect this to follow that pattern, but it would be interesting to see it studied.
If only you knew my father and his distrust of most things. He's been watching 5+ hours of Fox News daily for 30+ years. There isn't much left in that mind.
My experiences with the DMV have actually been pretty decent. I think a lot of their negative reputation is from how it used to be, but that they have improved substantially since then?
DMV is a state level agency and varies a lot depending on where you are. It's partially privatized here in Oklahoma and mostly painless (you only need the actual DMV for driver's tests, CDL background checks, etc.) but when I lived on the Illinois side of St. Louis I routinely heard of people spending hours in line.
Normally I'm not a huge fan of privatization but the way it's done here works great. The fees are set by the state and the agency gets a percentage, so if an area is underserved someone just opens another one.
The bottom line is that the country cannot spend more than it makes in tax income indefinitely and anyone who says otherwise is delusional. Unfortunately, I think the reckoning for all this debt will come sooner than many people expect.
You can deficit spend indefinitely as long as your deficit percentage is below your economic growth percentage. That keeps the total debt as percentage of the economy stable and the amount of tax you need to service the debt a stable percentage of your total tax.
If you do that it can be a good idea. It's a way to accelerate investment. It can also be a good idea to modulate your deficit in a cycle counter to the economy so that it acts as a stabilizer.
The US has been failing on all these. The deficits are too large and are high both in good and bad times. Eventually that breaks things.
Infinite growth is possible as long as your economy trades things that are not physically constrained. Art can grow in value over time without hitting any constraints. And even if your economy doesn't grow in real terms, to service debt all you need is for the economy to grow in nominal terms, to have inflation. And even if your economy stagnates completely and has zero inflation you just need to bring your deficit to zero to maintain the debt level. Every year you can just pay the interest on the debt from taxes and your debt as percentage of the economy stays stable without ever paying down the debt.
Sort of yes and no. I don’t think indefinite spending was ever on the cards.
But if other countries tried to maintain the levels of US deficit / debt, they were given far less lenience from investors, in pressure / yields. This was because US was seen as, on the whole, fiscally responsible, very productive, and safer from shocks - to the point that when the US mortgage crisis exploded, the safe haven for assets was… the US.
As these assumptions are challenged, the US is waking up to what the European old economies experienced following 2008. Increasingly yields, increasing costs of borrowing etc.
If you’re reliably printing good GDP growth, higher level of debt may be good as it gives you more leverage, and drives more growth in turn. But leverage is a multiplier and it isn’t free, so if the engine sputters, you might find yourself falling out of the car at a greater speed…
A debt crisis like in eurozone countries in 2008 is very unlikely to happen in the US. For it to happen, it would require the fed working against the us government.
Well, the US clearly has far, far more rope than Greece or Italy. Question is, is that a buffer, or a perfect noose in the making.
The Fed seems already constrained by the administration to not raise rates. Yields went up anyway. US primary deficit is huge and so debt to GDP is accelerating from different angles - interest, increased spending, increased yield demand based off uncontrolled inflation expectations etc.
In fact I suspect that the mega-pivot to AI is an attempt to solve the problem by massively inflating GDP, so that the debt doesn’t matter - ie radically grow the economy. It remains to be seen if it pays off and solves US’s problems.
At the end of the day, the US cannot escape from the forces that drowned Greece - inflation, investor confidence, debt spiral. It’s totally avoidable, but the US seems determined to race full speed ahead at it. Let’s see if Trump can play chicken with economics.
It's basically the Liz Truss situation, except the UK could actually remove her after just one budget because the Conservative party weren't fully on board with her level of brainworms. Whereas the US's two legislative houses are 100% supportive of this.
> Whereas the US's two legislative houses are 100% supportive of this.
I think that it's more likely that many of them just like their jobs, and Trump has a history of orchestrating primary challenges against people who disagree with them.
Now, one could additionally argue that this is only possible because of their frankly insane gerrymandering, and one would be correct, so maybe it is ultimately their fault.
Greece doesn't have its own currency and is completely reliant on private debt markets. Investors, mostly banks, started demanding higher yields, and Greece couldn't do anything about it. The EU used that as an excuse to impose garbage economic policies (austerity) on them, but the whole crisis could have been avoided if the ECB had intervened to keep Greek bond yields close to the ECB's interest rate.
That’s not true, because it would have to mean that money is created by the private sector (or just magically springs into existence somewhere) and that taxing it is the only way for the Government to get it.
Money is a created thing, a creature of the state. We maintain certain fictions about it (like “tax to spend”, allowing the market to set bond yields most of the time and keeping track of the outstanding bonds as “government debt”) because people are scared that Governments wouldn’t be controlled enough to manage money creation if they overtly used the powers they have to issue currency… But effectively they still kind of do it…
And while it’s not perfect it’s actually far more stable than attempts at fixed exchange rates and pegging currency to commodities like gold (which always fails eventually, because it doesn’t stand to reason that the amount of gold or any other commodity in a country would correspond to how much money the economy needs. You can set the exchange rate but it always drifts, so those periods tended to swing between big deflation and then inflation, with panics, recessions, and financial crises every few years)
That's half correct (and yes I did leave that bit out as a simplification to the argument), banks do create money, but not in the mechanism called "fractional reserve banking" which is only found in textbooks because it would actually violate accounting rules (it's true that banks only hold a fraction of their assets as central bank reserves but the mechanism referred to as "fractional reserve banking" and related "money multiplier theory" can't work because the bank can't make a loan out of a deposit because it would require two entries on the same side of the balance sheet).
But it is true that when a bank creates a loan (which to them is an asset, but to the borrower is a liability - debt) it creates a matching deposit (a liability to them) which does increase the money supply. The amount of central bank reserves is not hugely relevant to the process, that's more of a liquidity management thing. The main limitation is actually capital adequacy regulations.
But all of that aside, a Government doesn't need banks to create money so they can tax it, it permits banks to do it by granting them a banking license.
The reckoning will be put on Democrats. It's quite hard to do this while the Republicans hold all the power, but as soon as it flips the media will care again.
I think countries can, but there is a limit to how much debt you can have. It’s fine and even likely better for countries to have some deficit, but not $40T while also starting a war with Iran and imposing random tariffs that destabilize the world economy (+ attacking your allies, and all the other things Trump has done over the past decade, including adding an insane amount to the deficit)
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