Meta Econ Takeover Day 32 \ stacker news ~meta

2687 sats \ 23 comments \ @Undisciplined 18 Nov 2023 meta

One of the big questions I always want to know is "Why is it different this time?"

We've gone decade after decade with people explaining why the debt can't be sustained. Keynes' great line "The market can stay irrational longer than you can stay solvent." seems to apply to these analyses.

Is it different this time? If so, how? If not, what's the way out this time?

Why the National Debt is Now Threatening the Regime Ryan McMaken | Tho Bishop | Peter St. Onge

"With the costs of financing the national debt now exceeding the costs of military spending and major social programs, Peter explains why government spending is now a crisis the regime can't ignore."

view all related items

606 sats \ 10 replies \ @siggy47 18 Nov 2023

I have been reading doomsday faux economic books as cheap entertainment for a very long time. In the 1980s it was all about how Japan would overtake the U.S. and become the world economic superpower. It seems funny now. That's why I never buy doomsday scenarios anyway, though I love imagining them. I'm not convinced this time is different. The U.S. must avoid deflation at all costs, since the debt load would really be apocalyptic at that point. The logical path is to attempt to gradually increase inflation, while continuing to create overly optimistic gauges (CPI) that downplay reality. The average american won't realize they are getting boiled in the pot. That will enable the U.S. to inflate away its debt service. Bitcoin will benefit, as will inflationary assets like stocks and real estate. I think this scenario is more likely than a dramatic worldwide disaster.

486 sats \ 9 replies \ @Undisciplined OP 18 Nov 2023

That tends to be my take, but people are still really sensitive about price inflation. I don't know if quietly boiling them is on the table right now.

The wildcard is this rapid escalation towards WWIII. I don't know how effective any particular wartime measures might be, but people have certainly put up with a lot during wartime. I could imagine some kind of rationing program being used to stifle consumer demand signals.

207 sats \ 8 replies \ @siggy47 18 Nov 2023

I know that's a common suspicion, but it seems to me that intentionally reducing demand will exacerbate the deflationary trends that may already exist.

537 sats \ 7 replies \ @Undisciplined OP 18 Nov 2023

You're forgetting about all the government deficit spending that will be happening to fund the military.

440 sats \ 6 replies \ @siggy47 18 Nov 2023

I think about Occam's Razor. It seems far simpler and more likely for the U.S. to reduce rates, causing more paper gains for the asset owners and hope some wealth trickles down to the have nots, while inflation settles in a few points higher than it is now. In essence, kicking the can down the road a little longer. If wealth inequality starts causing social unrest, then they break out the heavy artillery, like a war or another pandemic.

537 sats \ 5 replies \ @Undisciplined OP 18 Nov 2023

That certainly might be what happens. However, rulers seem to be aware that inflation can cause severe civil unrest, which makes it the most existential threat to their hold on power. Generally, when they play around with high inflation, it's after the populace has had some time to recover from the last round of high inflation.

It seems like we differ a little on where we are on the path towards major unrest.

390 sats \ 4 replies \ @siggy47 18 Nov 2023

I'm by no means certain. I have believed the end is near so many times in my lifetime, and there always is another can to kick.

537 sats \ 3 replies \ @Undisciplined OP 18 Nov 2023

That's fair. What do you think about the whole "never let a crisis go to waste" angle?

They must be looking at this Israel/Palestine situation as an opportunity to get away with something.

view replies

390 sats \ 3 replies \ @gabybaby 18 Nov 2023

Sadly, while I hope that it would be different this time, it's likely not to be. Lots of fantastic comments about possible scenarios already so I'll try and focus on what an average consumer in the US might think about (or, more interestingly, not think about).

I think what astounds me the most is what I consider to be the greatest con perpetrated against the people, that is: government is always somehow the hero and the solution, not the perpetrator and the villain.

Like the highly publicized regional bank implosion this past summer. It's clear to us that these banks failed because of bad policy at the highest levels. But Congress' natural response is to say we need MOAR regulation. And the American public seems to buy that.

I've been reading Thomas Sowell's A Conflict of Visions to try and better understand why there seems to be such a gulf between people's thought patterns, namely those who have opted out of the Matrix (see the government for what it is) and those who haven't (see the government as something being perfected as if perfect regulation/laws could be achieved).

I'm not too much of an armchair philosopher to ruminate about the very core of each position, but it seems obvious to me that if the same party turns up time and time again at the heart of core issues, maybe they should be looked at with more scrutiny?

Curious for anyone's thoughts on the above, thanks.

50 sats \ 2 replies \ @Undisciplined OP 18 Nov 2023

In short, I view statism through the same lens as any other cult. You can't expect cult members to blame the leadership, no matter how obvious that conclusion is from the outside, because they have Stockholm Syndrome.

That manifests in an interesting way in representative governments though. It isn't the particular politicians who occupy the position of cult leaders, rather it's the offices they hold. When things go wrong people are willing to blame individual politicians, but it won't occur to them that the power exercised by that office is the problem.

390 sats \ 1 reply \ @gabybaby 18 Nov 2023

No surprise, we agree completely on that. I've found it particularly amusing to go through the exercise of asking statists why their favorite ABC XYZ federal department should be given expanded power or the benefit of the doubt when it's clear their policies have been ineffective. The contortions, mental gymnastics, and straw manning that ensues is hilarious.

50 sats \ 0 replies \ @Undisciplined OP 18 Nov 2023

Reason just isn't the right approach. My wife and I actually have close friends who were in a normal cult. There's really not much you can do until they're open to thinking outside of the cult, which usually requires something internal to shake their faith a little.

390 sats \ 1 reply \ @grayruby 18 Nov 2023

I don't see drastic cuts to spending coming, or significantly higher taxes, so the only solution is YCC and some fancy new version of QE.

They know sending money directly to the people is highly inflationary on food, energy and the goods people need to sustain themselves but it's hard to imagine the populous won't demand it as their standard of living continues to erode.

0 sats \ 0 replies \ @Undisciplined OP 18 Nov 2023

The silver lining of inflation in food, energy, shelter, and used car prices, is that none of those are part of the official CPI estimates.

207 sats \ 5 replies \ @gnilma 18 Nov 2023

It's the same each time, until it isn't. Mandibles.

21 sats \ 4 replies \ @Undisciplined OP 18 Nov 2023

Sometimes I wonder if that's the extent of it. There's no obvious reason it would be different, it just is one time.

I have really felt like there's been an observable difference in how the ruling class has behaved since Trump. In game theory terms, it reminds me of the point in a repeated game when one player sees the end coming and starts openly brazenly screwing the other player.

212 sats \ 3 replies \ @gnilma 19 Nov 2023

Things usually stay the same and people go about their lives until life gets so hard that they can no longer cope and need to do something about it. These hardships can come from more rules, regulations, and restrictions from the ruling class; or they can come from the economic reality and total disastrous results caused by central planning.

Due to the freedom and ease of access to information that modern technologies introduced, the ruling class can feel that they are losing control over the populous. They are no longer able to control how people think and act through the control of information. The ironic thing is that the harder the ruling class try to grasp onto that control, the more draconian their regulations, the more people realize they are being control and will rebel against it. Furthermore, the more the ruling class try to central plan, the more the economy will fail, the more industries/production will collapse, and the more scarce resources will become. After all, humans want to be free and plentiful, and will likely to do something about it if they are not. When enough people / enough percentage of the population want to do something about them being not free and not plentiful, then that is when the time will be different.

21 sats \ 2 replies \ @Undisciplined OP 19 Nov 2023

I think there's something to the idea that new communications technologies lead to the collapse of regimes. The old power structures were built on the old technology and when that gets displaced people get a peek behind the curtain.

212 sats \ 1 reply \ @gnilma 19 Nov 2023

Hence, this time is different because people have more information and can see a bit more clearly and will act accordingly. Man must act my friend.

21 sats \ 0 replies \ @Undisciplined OP 19 Nov 2023

It's not exactly that people have more information It's that they get access to information that the regime used to be able to suppress.

Yes, people have to act. Also, yes, people won't act unless they're under sufficient pressure. We're seeing that, though. People are irate about the economic and political situation, and the new communications technology paradigm makes the regime's attempts at controlling the narrative ineffective.