> And he hinted at a novel approach to monetary policy, suggesting that “the ultimate intervention is our military”.
Yes, that was both funny and tragic. But it also demonstrates why smart people made him president: he is beyond perfect for redirecting attention. By burning the institutions down and by severing international relations, a certain class of people can finally disable the corrective and limiting mechanisms that keep them in check. Even if that means the whole country needs to be burned down. Zero sum in business, zero sum in church, zero sum in state governance.
I wouldnt call those people smart. They might be playing a game optimally in the short term, but they are ruining a long term system. And i dont mean centuries, but decades. They need the general population 20 years from now to have grown up in a safe and prosperous environment with good education accross the board and the country to have the global influence necessary to maintain all that. They're throwing all that away for more cornering more of a market for the next 5-10 years. Its kinda dumb
I don't disagree that they're locusts, but 'American' has been leaning heavily in the same direction as locusts for a long while. That's why they currently hold US Passports, the most fertile breeding ground.
You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West.
There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU... WILL... ATONE!
Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today.
What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do.
We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that... perfect world... in which there's no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused.
The prevailing mentality seems to be that if we don’t win in the next three quarters it will be such a catastrophe that there won’t be a future at all.
At any given time, there are large numbers of influential people with no long term horizons, only a short one that is rapidly approaching. For these people, a good 5-10 more years may be all they really need. That’s why we need to invent life extension tech that gives elites more incentive to think long term, even if most regular people only live normal lifespans.
There are pros & cons to term limits, but I think an age limit would get you most of the same benefits with a lot less resistance. Anyone who will be over 65 when entering a position should be ineligible to be elected or appointed to that position. Judges with lifetime appointments should be forced to retire on their 65th birthday. It's a clean, easy to understand & enforce rule, and provides plenty of time for people to make a succession plan before their brains turn to mush.
That’s why we need to tax billionaires into oblivion. The solution isn’t to make them immortal in the hopes that this somehow makes them benevolent, it’s to ensure nobody has that kind of power in the first place.
Repeated radical cashectomies, until wealth inequity is decidedly pro-democracy.
Alas, from the little I've read about both reform (new legislation) and revolution (new constitution), the wealthy elite squirm thru, never truly losing their power advantage. (Probably because any new agenda still needs to be capitalized.)
eg The Nordic model worked pretty well for a while. But weren't durable enough. Allowing the Wormtongues to undermine it all, one millimeter at a time. Opening the door for another cycle of revanchism.
1 in 6 households in the US are millionaires. And they're nearly a mutually exclusive group with the underemployed and educated. These are very large groups of ordinary people who are very much not running the ship right now.
There's a billionaire in the White House who's hosting billionaire guests on the regular, there was a line of billionaires behind him at the inauguration, and a temporary trillionaire living in the White House for a while and shredding every agency that had power to regulate him.
>Nope it’s the millionaires. It’s the underemployed educated elite.
Wrong. The billionaires want the public focused on the low-end millionaires, who largely have no more control over policy than the poorest pensioner or laborer, while the billionaire-class and their willing enablers destroy the society and environment to their own benefit.
It's just a different spin on the ages-old strategy of dividing the non-ruling-class and pitting them against each other. The one thing the billionaires want to avoid is a unified public coming for their wealth and influence.
"Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: 'After the revolution even we will have more, won't we, dear?' " - Steinbeck
I’m reminded of the recent study claiming that British imperial activities had a negligible impact on the quality of life for non-elites, but was enormously enriching for the elites. Tough to take entirely seriously due to no perfect control sample, but it’s at least provocative to me to consider this: all this pain and suffering for what? The worst person you can imagine being able to piss in a gold toilet and grope women (and men) of a questionable age with coerced consent?
From 1945 to Reagan may have been one of the most extraordinary times for the “middle class” of any nation in the history of the world. The distribution of wealth kept pace with the advances of efficiency. What a privilege it must be to have been an adult in a non-discriminated class during that period, and the honeymoon phase that kept steam until the Great Recession.
I think it is past time to admit that a lot of the roots of our current issues, both culturally and economically, can be traced back to the Regan era. Culture wars have always been a thing, but 'the moral majority' throwing out reason for emotion and economic policy glorifying the short term gain of the rich because it will 'eventually' benefit the poor got a real boost under Regan and then Bush. The results of that, unlike the promised economics, have been trickling down ever sense.
The winners of WWII basked in their own glory for far too long, constantly looking back at a grand victory instead of looking forward to ensure a grand future.
The march of technology papered over a lot of cracks, but the cracks keep on growing.
I don't think we can say this one is a distraction - historically the US dollar has involved the "secret" deal [0] where the US was trading military protection in the Middle East for having a major energy supplier only accept dollars. Probably some other similar shenanigans going on that aren't public too.
I imagine the US's poor showing against Iran and the implied inability to coerce medium powers is a factor in the decision making of the serious buyers of US treasuries. It has never been entirely clear how much value the US military's ability to control global trade really backed the dollar; but Trump's style is to hit people with every possible threat and reason to do what he wants in case it helps.
People who didn't mind that he is a racist, xenophobic, anti-semitic, bigoted philandering malignant narcissist grifter made him president.
Intelligent lawyers degraded themselves to make it happen again.
I do think trying to backdate the idea that intelligent people are behind Trump's rise because supposedly intelligent people are now on the Trump train for their own expedient reasons ignores that the beginning of the Trump movement was grounded in his explicitly bigoted and racist proclamations.
It's not like he came down the escalator with any pitch to intelligent people. Appeals to hatred, bigotry, conspiracy theories and racism were a key plank of how he drove his candidacy from the very beginning. Enough Americans chose this revolting human being as their avatar to make it happen. Twice.
Nobody was conned by intelligent people: they went along with the racist carnival huckster.
> People who didn't mind that he is a racist, xenophobic, anti-semitic, bigoted philandering malignant narcissist grifter made him president.
It's not that they "didn't mind", but many probably were happy that he was those things:
> If you’re a racist, you found your guy. If you’re a misogynist, you found your guy. If money is your only religion, you found your guy. If your heart is armored shut, you found your guy. If you mock the disabled, you found your guy. If intelligence makes you insecure, you found your guy. If you’re a sexual predator, you found your guy. If you trade in humiliation and conspiracy and filth, you found your guy.
> If you’ve never done a single hour of emotional inventory, you found your guy. If you cheat, stiff contractors, bankrupt your obligations, and call it savvy, you found your guy. If you lie as easily as you breathe, you found your guy. If cruelty feels like strength, you found your guy. If white grievance is your comfort food, you found your guy. If your ego is a black hole no title can fill, you found your guy. If warmongering fuels your ego, you found your guy, If empathy feels like weakness and dominance feels like oxygen, you found your guy.
> If he’d only carried one or two of these pathologies, he might have been dismissed as just another loud, damaged man. But he carried a buffet of them. That was the appeal. Millions could locate themselves somewhere in the wreckage. They didn’t have to agree with all of it. They just had to recognize a piece of themselves in it.
> It was never really about him. It was about the validation. The absolution. The permission. He didn’t invent the resentment; he amplified it. He didn’t create the cruelty; he normalized it. He gave millions the intoxicating relief of hearing their ugliest impulses echoed back at rally volume.
[…]
* Michael Jochum, Not Just a Drummer: Reflections on Art, Politics, Dogs, and the Human Condition
I was in college in the run-up to Trump's election. I knew a lot of left-leaning people who were very tired of the neo-liberal status quo, and who were willing to put their time and money into making Obama's promised but undelivered change into something real. And then along came Donald Trump, and, "OMG look how awful he is! Vote Blue No Matter Who!"
It's a sucker's game, and the voters on both sides of the spectrum get taken again and again and again. "Sure, Our Politicians are Bad, but the Other Side's Politicians are Much Worse!" Voting for the lesser evil for decades is just taking the scenic route to Hell as a country.
Meanwhile, no matter who's in charge, there's always just enough votes in Congress for military spending and corporate bailouts, but never enough votes for any sort of significant populist economics or meaningful regulation that might push back against the billionaire/big corporation stranglehold on the country and government. (President Obama, with a working Democratic majority, delivered... a national health care plan designed by the right-libertarian Cato Institute and pioneered at the state level by his Republican opponent Mitt Romney.)
Even now when things have gone so far off the rails, the average American knows basically nothing about what's going on. There's a ton of information but no reliable way to split it from misinformation, so people just glom on to whatever aligns with their worldview. Our future feels pretty hopeless to me.
Nothing is happening because you aren't doing anything and are even spreading hopelessness! Imagine someone at work or on a team who acted that way. It's psyops for the opposition. It is the behavior of losers (sorry).
There is no meaningful "opposition" at the national level. There's not even a pretense of it. The same Democratic Party that failed to hold Reagan and Bush responsible for Iran-Contra, that failed to hold Bush responsible for torture and domestic spying, that failed to hold Trump responsible for a coup and stealing secrets, that did nothing with the Epstein files, is not going to "oppose" anything. They'll slap on a fresh coat of paint, say calming things to the investors, and keep right on with business as usual.
That behavior is the cause. The question must be answered, and if you haven't answered it after 8 (since 2016) or 26 (since 2000) or more years, you aren't trying.
How does the Republican party do these things without losing votes? The likely causes seem obvious to me, but the real problem is that people who oppose them need to believe again that they can do anything, that they are responsible, that they won't be stopped, and stop accepting helplessness.
The military threats include burning down other countries.
Now, people accept the "no angel" defense for Iran and Venezuela. Just like a cop is allowed to execute someone in the street if they have a criminal record. But now we have to work out how serious the threats against Western countries are, or whether they're just routine Trump bullshit for social media. Is there a real prospect of the use of force against Canada, or Canadian nationals in the US? Is there a limit to the trade sanctions? If the US can sanction individual ICC members, can't they exert pressure on Carney by debanking him too?
We know from crime that the only way to solve a crisis is to escalate, because that is what zero-sum dynamics basically forces one too. In that process, everything becomes a tool and there is barely anything that is off-limits.
Putting aside the possible change of guards with the other party getting into power, the USA are long-term heading to a serious crisis. The dems were able to reduce deficits in the past (a bit surprisingly because that contradicts the narrative), but I think their space for maneuvering is getting increasingly small. There is a serious possibility that notwithstanding efforts to save the ship the long term trend cannot be reversed because so many critical processes had been set in motion, about which control has been lost.
What happens after a decade? You can do the math. A disgruntled electorate want final solutions to an increasingly heavier crisis. It takes real states(wo)men to re-architect the USA in favor of the public. Also, if you ever open 'social' media or regular media even, you could experience first-hand how hard it has become to reach the public. The vested interests are not willing to give up their power.
When a debt crisis occurs, there is only one good option and many bad ones. The good option is the debt holders realize they need to compromise and are willing to forgive part of the debt for proper governance. ie. forgive part of the debt as long as the US adheres to a strict budget which involves raising taxes and cutting services. And no more giving out tax breaks and tax holidays as if they were free.
All the other options are infinitely worse. The problem is that such a deal is political suicide. MAGA will run on repealing the deal like they ran on dismantling Obama care. They are the party of financial self immolation.
Such a deal is basically not possible. See the Argentina "pari passu" fiasco. Because US T-bills are everywhere. They are, to use a Claude-ism, load bearing for the world economy.
There is no "adults outside the room" who can intervene to fix the situation. Either Americans sort things out among themselves, or they will end up with the traditional Latin American solution to a debt crisis: hyperinflation. Which some of the right have been salivating about ever since FDR.
The window is still pretty large. Raising taxes at low to moderate levels would be sufficient to close the gap and restore confidence in debt without slowing the economy.
The problem is that every time democrats make progress republicans pass massive tax cuts. Four successive republican administrations have passed massive tax cuts. Trump alone is responsible for 30% of all debt.
The problem is that voters punish anyone who raise taxes. The first bush lost reelection because he broke his “read my lips no new taxes promise” when he was actually trying to behave responsibly.
> The window is still pretty large. Raising taxes at low to moderate levels would be sufficient
Agreed, short term there is. But tax=theft narratives and other cultural beliefs are real obstacles.
> The problem is that every time democrats make progress republicans pass massive tax cuts. Four successive republican administrations have passed massive tax cuts. Trump alone is responsible for 30% of all debt.
True, but people won't believe you if you would tell them, or they will ignore it. Furthermore, the dems don't own the media, including the 'liberal media'. I expect blame games and victim-playing turned to the max on news stations after any change of guards. What doesn't help too is that every politician has to literally buy their seat, so sponsors have ultimately more power than the electorate.
Exactly. He and his accomplices don't give a flying fuck whether the whole country goes down in flames, because they already have fuck-you money, and they're only getting richer. That's why arguing about how incompetent, demented, or whatever he is misses the point completely. And the "incompetence" of his underlings doing the work of destruction is a feature, not a bug in this scheme. The chaos they sow is the perfect cover to do what they want unhindered while everyone else is distracted. It would be beautiful if it weren't so unfathomably evil.
Are you saying that the federal government in the US is no longer an institution? This is news to me. Is there some reporting on this which specifies the exact constitutional obligations that the federal government must adhere to that it no longer adhering to? As far as I am aware the US federal government is still operational and is still carrying out all its constitutional duties. I guess I was severely misinformed. Thank you for clarifying and for the sources you will provide which specifies the exact constitutional functions it must provide that it's no longer providing.
Social Security / Medicare need to reduce benefits and increase taxation. Let's start with the easy one; social security taxes. Make every dollar of income be taxed for social security. If you make over $150k (pick a number, I don't care where it is), then 100% of your social security is taxed as income. Or maybe tax it a little more.
Cut the federal government. (mini-doge, for lack of a better term). Stop the growth in the budget of each department. Pull back 10%; done sanely by assessing what the department is doing, what it is required to do, and what it doesn't need to do.
Cut the military. Do we need both a land based and sea based nuclear deterrent? Get rid of 1 of them. Cut active duty strength 10%. Stop ridiculous projects like "B-52 Re-engine and Radar update". (So, I am going to put money into my 1950 ford, when I can buy a 2026 model (B21) at a reasonable price... this is absurd)
Raise taxes. Not a lot, but raise them. Bring in more revenue. You don't have to eat the rich, just reach a little deeper into their pockets. (also, I don't care how you define rich. Pick a number)
Do all of these in a moderate amount, and you will be OK. The yearly deficit will shrink, and some of the outstanding bonds will be paid. It doesn't have to be fixed in a year; a 20 year plan, executed, is fine.
Almost everything this administration does is inflationary. You cannot have tariffs, oil crisis, tax cuts, high debt spending without long-term investors getting worried that they won't meaningfully get their money back in 10 or 20 years from now.
Trump is surrounded by people whom appear subservient under the sort of shallow gaze that Trump can muster if he tries hard enough, but in reality Trump is of course a tool, yes a pretty clumsy one who keeps trying to remind you who is the president here, but he is just following carrots dangled by very smart people with the means to keep Trump feeling the endorphins that Trump believes he is entitled to for winning in 2024.
And I gotta be honest, the carrot danglers don't seem to have a prosperous and thriving democracy in mind as one of their goals lol
There's a version of smart that they may be, but it's not a version of smart that is generally a parent of children they care about.
The future they're creating, no matter how much money they have and pass on, is going to be worse for their children and grandchildren. That's not smart, that's incredibly selfish and, regarding biological legacy, self-defeating.
How much of it is "the current administration" and how much is simply the continuation of a much longer trend? The US has been at war with this or that country in the Middle East for as long as I'm alive and I'm almost 40. Same with tax cuts, high spending and so on. It's easy to blame everything on Trump (or Reagan), but it seems to be a much broader issue with the whole system
Yes, this has been going on a long time. However, I think there is quite a bit of data about who is in charge or the White House and Congress when taxes go down/up or the deficit goes down/up, etc. It doesn't take more than one online search to see a very distinct pattern.
Democrats Change in Deficit
--------- -----------------
Joe Biden -6.1% GDP
Barack Obama -6.4% GDP
Bill Clinton -5.0% GDP
Jimmy Carter -0.2% GDP
Republicans Change in Deficit
----------- -----------------
Donald Trump +8.6% GDP
George W. Bush +11.0% GDP
George H. W. Bush +1.1% GDP
Ronald Reagan +0.2% GDP
Gerald Ford +2.3% GDP
Richard Nixon +0.7% GDP
Dwight Eisenhower -1.1% GDP
And yet every single Fox talking head says the opposite, resulting in half the country thinking it's Democrats responsible for the deficit. Propaganda is magic.
Let's count our blessings that the ongoing campaign to fill whitehouse.gov with Republican partisan hackery doesn't extend to the boring accounting parts. Yet.
Clinton balanced the budget. There was a surplus. Go read
Articles from the 90s there was fear that we would pay down the debt too fast and it would harm the economy.
Obama was on tracy to reduce the deficit and likely would have had the financial crisis not required stimulus.
Biden was using debt to invest in infrastructure and things like power generation that would yield returns unlike tax cuts that just exacerbate wealth concentration and inflation by asset appreciation due to capital chasing the same assets.
It’s not symmetrical one party is driving this and the irony is that they are the “fiscally responsible” party.
No amount of discipline is possible for democrats if every time they balance the budget republicans use the savings to cut taxes further.
Printing hundreds of billions of dollars is also inflationary. Governments change but the impact of all this takes a very long time to flow through the economy.
All that has to happen to fix this is taxes. The ultra rich tax's need to be raised to a level the US had before Reagan. Instead the people running the US want the poor and middle-class to pay for everything and enrich the rich even more.
Until that is fixed, the US will end up as a banana republic with lots of nukes.
> rates on mortgage loans and other long-term lending across the economy – are walloping his popularity, helping freeze the housing market
Looking like 2007 again ? The GOP loves flirting with creating a massive depression.
2007 was very different. There was an entire industry propped up by artificially manufactured speculative demand. This was a real industry that produced loads of jobs,drove downstream industries and had significant involvement from a huge portion of the population.
Once again, I'm begging you, with tears in my eyes to learn the difference between statutory and effective tax rates. Do I disagree that there were headline rates of 70%? No. Did anyone pay those rates on any meaningful amount of their income? Also no.
Inflation was really solved when Volker raised the interest rates. Nixon, Ford, Carter all struggled with rising prices.
Strange enough, I was alive back then and clearly remember my grandmother applauding Nixon's attempt to 'freeze prices'. Did not work.
The numbers published by the government may not reflect how it is felt in the populace. I think the current inflation is 'worse' than the 1970's. One thing is that wages were getting bumped all the time to compensate; not something we see today.
Strong agree. Raise taxes for everyone (except those at the bottom, please). Draw the line wherever you want, we can argue about where, but it has to be drawn.
What does inflation have to do with the tax rate for the wealthiest? Also, IIRC I read the climate cooled a little in the 1970s - can we attribute that to the tax rate too?
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.
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.
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)
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)
This is round three. Half the electorate saw round two and said, “more of that, please.” That’s why we’re fucked, not because of the particular idiot they chose.
A garbage article. Yields went down after the housing bubble in 2007 because the central bank interest rates were lowered, not because the investors decided to flock to a safe asset.
Yields are high because the inflation is also running high and it doesn't like it will come down anytime soon so the central bank interest rates will also be kept at a higher level.
Long term bonds can be replaced with short term bonds which are constantly rolled over. The bond yields are pricing in the future interest rates, nothing more.
Treasury interest rates just decoupled from bond yields. That's the news.
They were only coupled in the first place because treasuries were seen as the safest of havens. That means everything else had to pay more interest than them. So is that no longer the case?
The last Fed meeting saw high inflation and decided not to adjust interest rates, with the stated reasoning that the market will fix it by itself. This could be how the market fixes it by itself.
That’s the news. The fed is desperately trying to get interest rates lower, but the free market isn’t buying it. The treasury is also pulling out some very desperate moves to control this, like selling euro for JPY without even telling the EU, we will see how it works out.
> Long term bonds can be replaced with short term bonds which are constantly rolled over
Bessent tried that, didn't work to calm down the bond yields. Unless you meant the USA is not interested in longer term bonds, which is obviously untrue, because Bessent is intervening.
> The bond yields are pricing in the future interest rates
For investors, the price is the risk they want to get compensation for. The investors are increasingly worried about the credibility of the USA. Sure, the USA can print dollars, but Banana Economics Class teaches you that trying to inflate oneself out of debt with reckless printing will have some adversarial effects. You can't fool smart money that easily.
selling stocks and buying bonds in a recession where interest rates go down (so bonds are priced higher) and expected revenue for most sectors go down is a no brainer.
Agree, but there's also the expectation of future debt. A bigger debt means a bigger issuance of bonds, so the new supply-demand equilibrium moves the rates higher as it's the only way to convince investors to allocate more to bonds.
Technically, yes, but if you create demand for long term bonds and create supply for short term ones, you'll flatten the yield curve and pay long term yields for short term durations.
We are in a different phase of
Capitalism, real interest rates will be kept low mechanically. Nominal Inflation rate will always be lied about. Bonds holders will lose value by design.
The governments and central banks across the world have no other choice. Corporations and big money have robbed our world of capital and are now changing the game to pull up the ladder behind them
I wouldnt call those people smart. They might be playing a game optimally in the short term, but they are ruining a long term system. And i dont mean centuries, but decades. They need the general population 20 years from now to have grown up in a safe and prosperous environment with good education accross the board and the country to have the global influence necessary to maintain all that. They're throwing all that away for more cornering more of a market for the next 5-10 years. Its kinda dumb
Those people aren't really "Americans" in any meaningful sense, even if they happen to hold US passports.
Once they're done with the US they'll just move onto the next country, same as they moved onto the US once the British empire was done.
They're just locusts
I don't disagree that they're locusts, but 'American' has been leaning heavily in the same direction as locusts for a long while. That's why they currently hold US Passports, the most fertile breeding ground.
From Network (1976):
You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West.
There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU... WILL... ATONE!
Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today.
What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do.
We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that... perfect world... in which there's no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused.
The prevailing mentality seems to be that if we don’t win in the next three quarters it will be such a catastrophe that there won’t be a future at all.
At any given time, there are large numbers of influential people with no long term horizons, only a short one that is rapidly approaching. For these people, a good 5-10 more years may be all they really need. That’s why we need to invent life extension tech that gives elites more incentive to think long term, even if most regular people only live normal lifespans.
Absolutely not. The only thing saving us from these people and their senility is the knowledge that they will eventually die.
(Obama is so far the only US president born after 1946)
This is why we need term limits everywhere. People are living longer. Without term limits on every position democracy won't survive.
There are pros & cons to term limits, but I think an age limit would get you most of the same benefits with a lot less resistance. Anyone who will be over 65 when entering a position should be ineligible to be elected or appointed to that position. Judges with lifetime appointments should be forced to retire on their 65th birthday. It's a clean, easy to understand & enforce rule, and provides plenty of time for people to make a succession plan before their brains turn to mush.
That’s why we need to tax billionaires into oblivion. The solution isn’t to make them immortal in the hopes that this somehow makes them benevolent, it’s to ensure nobody has that kind of power in the first place.
Yup.
Repeated radical cashectomies, until wealth inequity is decidedly pro-democracy.
Alas, from the little I've read about both reform (new legislation) and revolution (new constitution), the wealthy elite squirm thru, never truly losing their power advantage. (Probably because any new agenda still needs to be capitalized.)
eg The Nordic model worked pretty well for a while. But weren't durable enough. Allowing the Wormtongues to undermine it all, one millimeter at a time. Opening the door for another cycle of revanchism.
Military coups don’t often get led by generals or top brass. It’s usually colonels or mid ranked officers who lead coups.
Similarly the concern over billionaires are overplayed. They’ve got too much skin in the current game to destroy the current game.
Nope it’s the millionaires. It’s the underemployed educated elite. Those are folks who will destroy a country for their own marginal gain.
1 in 6 households in the US are millionaires. And they're nearly a mutually exclusive group with the underemployed and educated. These are very large groups of ordinary people who are very much not running the ship right now.
There's a billionaire in the White House who's hosting billionaire guests on the regular, there was a line of billionaires behind him at the inauguration, and a temporary trillionaire living in the White House for a while and shredding every agency that had power to regulate him.
Only billionaires can afford to pay to have their entire reality replaced with fantasy.
Nitpick: At a certain level of millions, below a billion, this is also true, however. But it makes for a longer / worse soundbite.
>Nope it’s the millionaires. It’s the underemployed educated elite.
Wrong. The billionaires want the public focused on the low-end millionaires, who largely have no more control over policy than the poorest pensioner or laborer, while the billionaire-class and their willing enablers destroy the society and environment to their own benefit.
It's just a different spin on the ages-old strategy of dividing the non-ruling-class and pitting them against each other. The one thing the billionaires want to avoid is a unified public coming for their wealth and influence.
"Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: 'After the revolution even we will have more, won't we, dear?' " - Steinbeck
"I supported this revolution, should I not get more than those who did nothing?!"
I’m reminded of the recent study claiming that British imperial activities had a negligible impact on the quality of life for non-elites, but was enormously enriching for the elites. Tough to take entirely seriously due to no perfect control sample, but it’s at least provocative to me to consider this: all this pain and suffering for what? The worst person you can imagine being able to piss in a gold toilet and grope women (and men) of a questionable age with coerced consent?
From 1945 to Reagan may have been one of the most extraordinary times for the “middle class” of any nation in the history of the world. The distribution of wealth kept pace with the advances of efficiency. What a privilege it must be to have been an adult in a non-discriminated class during that period, and the honeymoon phase that kept steam until the Great Recession.
I think it is past time to admit that a lot of the roots of our current issues, both culturally and economically, can be traced back to the Regan era. Culture wars have always been a thing, but 'the moral majority' throwing out reason for emotion and economic policy glorifying the short term gain of the rich because it will 'eventually' benefit the poor got a real boost under Regan and then Bush. The results of that, unlike the promised economics, have been trickling down ever sense.
The winners of WWII basked in their own glory for far too long, constantly looking back at a grand victory instead of looking forward to ensure a grand future.
The march of technology papered over a lot of cracks, but the cracks keep on growing.
Yep, they were the vanguard of "fuck you I need to get mine at all costs."
I don't think we can say this one is a distraction - historically the US dollar has involved the "secret" deal [0] where the US was trading military protection in the Middle East for having a major energy supplier only accept dollars. Probably some other similar shenanigans going on that aren't public too.
I imagine the US's poor showing against Iran and the implied inability to coerce medium powers is a factor in the decision making of the serious buyers of US treasuries. It has never been entirely clear how much value the US military's ability to control global trade really backed the dollar; but Trump's style is to hit people with every possible threat and reason to do what he wants in case it helps.
[0] https://en.wikipedia.org/wiki/Petrocurrency#1970_to_2000
Smart people helped him be the candidate.
People who didn't mind that he is a racist, xenophobic, anti-semitic, bigoted philandering malignant narcissist grifter made him president.
Intelligent lawyers degraded themselves to make it happen again.
I do think trying to backdate the idea that intelligent people are behind Trump's rise because supposedly intelligent people are now on the Trump train for their own expedient reasons ignores that the beginning of the Trump movement was grounded in his explicitly bigoted and racist proclamations.
It's not like he came down the escalator with any pitch to intelligent people. Appeals to hatred, bigotry, conspiracy theories and racism were a key plank of how he drove his candidacy from the very beginning. Enough Americans chose this revolting human being as their avatar to make it happen. Twice.
Nobody was conned by intelligent people: they went along with the racist carnival huckster.
> People who didn't mind that he is a racist, xenophobic, anti-semitic, bigoted philandering malignant narcissist grifter made him president.
It's not that they "didn't mind", but many probably were happy that he was those things:
> If you’re a racist, you found your guy. If you’re a misogynist, you found your guy. If money is your only religion, you found your guy. If your heart is armored shut, you found your guy. If you mock the disabled, you found your guy. If intelligence makes you insecure, you found your guy. If you’re a sexual predator, you found your guy. If you trade in humiliation and conspiracy and filth, you found your guy.
> If you’ve never done a single hour of emotional inventory, you found your guy. If you cheat, stiff contractors, bankrupt your obligations, and call it savvy, you found your guy. If you lie as easily as you breathe, you found your guy. If cruelty feels like strength, you found your guy. If white grievance is your comfort food, you found your guy. If your ego is a black hole no title can fill, you found your guy. If warmongering fuels your ego, you found your guy, If empathy feels like weakness and dominance feels like oxygen, you found your guy.
> If he’d only carried one or two of these pathologies, he might have been dismissed as just another loud, damaged man. But he carried a buffet of them. That was the appeal. Millions could locate themselves somewhere in the wreckage. They didn’t have to agree with all of it. They just had to recognize a piece of themselves in it.
> It was never really about him. It was about the validation. The absolution. The permission. He didn’t invent the resentment; he amplified it. He didn’t create the cruelty; he normalized it. He gave millions the intoxicating relief of hearing their ugliest impulses echoed back at rally volume.
[…]
* Michael Jochum, Not Just a Drummer: Reflections on Art, Politics, Dogs, and the Human Condition
I was in college in the run-up to Trump's election. I knew a lot of left-leaning people who were very tired of the neo-liberal status quo, and who were willing to put their time and money into making Obama's promised but undelivered change into something real. And then along came Donald Trump, and, "OMG look how awful he is! Vote Blue No Matter Who!"
It's a sucker's game, and the voters on both sides of the spectrum get taken again and again and again. "Sure, Our Politicians are Bad, but the Other Side's Politicians are Much Worse!" Voting for the lesser evil for decades is just taking the scenic route to Hell as a country.
Meanwhile, no matter who's in charge, there's always just enough votes in Congress for military spending and corporate bailouts, but never enough votes for any sort of significant populist economics or meaningful regulation that might push back against the billionaire/big corporation stranglehold on the country and government. (President Obama, with a working Democratic majority, delivered... a national health care plan designed by the right-libertarian Cato Institute and pioneered at the state level by his Republican opponent Mitt Romney.)
… and yet America voted for him a second time. I just don’t get why
Even now when things have gone so far off the rails, the average American knows basically nothing about what's going on. There's a ton of information but no reliable way to split it from misinformation, so people just glom on to whatever aligns with their worldview. Our future feels pretty hopeless to me.
Nothing is happening because you aren't doing anything and are even spreading hopelessness! Imagine someone at work or on a team who acted that way. It's psyops for the opposition. It is the behavior of losers (sorry).
The main obstacle for the opposition is itself.
There is no meaningful "opposition" at the national level. There's not even a pretense of it. The same Democratic Party that failed to hold Reagan and Bush responsible for Iran-Contra, that failed to hold Bush responsible for torture and domestic spying, that failed to hold Trump responsible for a coup and stealing secrets, that did nothing with the Epstein files, is not going to "oppose" anything. They'll slap on a fresh coat of paint, say calming things to the investors, and keep right on with business as usual.
> I just don’t get why
That behavior is the cause. The question must be answered, and if you haven't answered it after 8 (since 2016) or 26 (since 2000) or more years, you aren't trying.
How does the Republican party do these things without losing votes? The likely causes seem obvious to me, but the real problem is that people who oppose them need to believe again that they can do anything, that they are responsible, that they won't be stopped, and stop accepting helplessness.
Project 2025 ain't gonna implement itself.
Next he'll be bombing US states guilty of 'election fraud'.
The military threats include burning down other countries.
Now, people accept the "no angel" defense for Iran and Venezuela. Just like a cop is allowed to execute someone in the street if they have a criminal record. But now we have to work out how serious the threats against Western countries are, or whether they're just routine Trump bullshit for social media. Is there a real prospect of the use of force against Canada, or Canadian nationals in the US? Is there a limit to the trade sanctions? If the US can sanction individual ICC members, can't they exert pressure on Carney by debanking him too?
We know from crime that the only way to solve a crisis is to escalate, because that is what zero-sum dynamics basically forces one too. In that process, everything becomes a tool and there is barely anything that is off-limits.
Putting aside the possible change of guards with the other party getting into power, the USA are long-term heading to a serious crisis. The dems were able to reduce deficits in the past (a bit surprisingly because that contradicts the narrative), but I think their space for maneuvering is getting increasingly small. There is a serious possibility that notwithstanding efforts to save the ship the long term trend cannot be reversed because so many critical processes had been set in motion, about which control has been lost.
What happens after a decade? You can do the math. A disgruntled electorate want final solutions to an increasingly heavier crisis. It takes real states(wo)men to re-architect the USA in favor of the public. Also, if you ever open 'social' media or regular media even, you could experience first-hand how hard it has become to reach the public. The vested interests are not willing to give up their power.
When a debt crisis occurs, there is only one good option and many bad ones. The good option is the debt holders realize they need to compromise and are willing to forgive part of the debt for proper governance. ie. forgive part of the debt as long as the US adheres to a strict budget which involves raising taxes and cutting services. And no more giving out tax breaks and tax holidays as if they were free.
All the other options are infinitely worse. The problem is that such a deal is political suicide. MAGA will run on repealing the deal like they ran on dismantling Obama care. They are the party of financial self immolation.
Such a deal is basically not possible. See the Argentina "pari passu" fiasco. Because US T-bills are everywhere. They are, to use a Claude-ism, load bearing for the world economy.
There is no "adults outside the room" who can intervene to fix the situation. Either Americans sort things out among themselves, or they will end up with the traditional Latin American solution to a debt crisis: hyperinflation. Which some of the right have been salivating about ever since FDR.
The window is still pretty large. Raising taxes at low to moderate levels would be sufficient to close the gap and restore confidence in debt without slowing the economy.
The problem is that every time democrats make progress republicans pass massive tax cuts. Four successive republican administrations have passed massive tax cuts. Trump alone is responsible for 30% of all debt.
The problem is that voters punish anyone who raise taxes. The first bush lost reelection because he broke his “read my lips no new taxes promise” when he was actually trying to behave responsibly.
Exactly. He and his accomplices don't give a flying fuck whether the whole country goes down in flames, because they already have fuck-you money, and they're only getting richer. That's why arguing about how incompetent, demented, or whatever he is misses the point completely. And the "incompetence" of his underlings doing the work of destruction is a feature, not a bug in this scheme. The chaos they sow is the perfect cover to do what they want unhindered while everyone else is distracted. It would be beautiful if it weren't so unfathomably evil.
"Give us money to pay for our military or else our military will intervene"
Which institutions has Trump burned down?
Scientific funding is in crisis.
The federal government? Ever heard of DOGE??
Are you saying that the federal government in the US is no longer an institution? This is news to me. Is there some reporting on this which specifies the exact constitutional obligations that the federal government must adhere to that it no longer adhering to? As far as I am aware the US federal government is still operational and is still carrying out all its constitutional duties. I guess I was severely misinformed. Thank you for clarifying and for the sources you will provide which specifies the exact constitutional functions it must provide that it's no longer providing.
Behold, the sea lion in its natural habitat.
You can’t be serious.
I'm not a psychopath but how are we supposed to fix the deficit without something like DOGE that can cut programs.
Responsible budget from congress.
Social Security / Medicare need to reduce benefits and increase taxation. Let's start with the easy one; social security taxes. Make every dollar of income be taxed for social security. If you make over $150k (pick a number, I don't care where it is), then 100% of your social security is taxed as income. Or maybe tax it a little more.
Cut the federal government. (mini-doge, for lack of a better term). Stop the growth in the budget of each department. Pull back 10%; done sanely by assessing what the department is doing, what it is required to do, and what it doesn't need to do.
Cut the military. Do we need both a land based and sea based nuclear deterrent? Get rid of 1 of them. Cut active duty strength 10%. Stop ridiculous projects like "B-52 Re-engine and Radar update". (So, I am going to put money into my 1950 ford, when I can buy a 2026 model (B21) at a reasonable price... this is absurd)
Raise taxes. Not a lot, but raise them. Bring in more revenue. You don't have to eat the rich, just reach a little deeper into their pockets. (also, I don't care how you define rich. Pick a number)
Do all of these in a moderate amount, and you will be OK. The yearly deficit will shrink, and some of the outstanding bonds will be paid. It doesn't have to be fixed in a year; a 20 year plan, executed, is fine.
Most spending is legislated and can’t be cut without congressional approval.
Almost everything this administration does is inflationary. You cannot have tariffs, oil crisis, tax cuts, high debt spending without long-term investors getting worried that they won't meaningfully get their money back in 10 or 20 years from now.
Trump is surrounded by people whom appear subservient under the sort of shallow gaze that Trump can muster if he tries hard enough, but in reality Trump is of course a tool, yes a pretty clumsy one who keeps trying to remind you who is the president here, but he is just following carrots dangled by very smart people with the means to keep Trump feeling the endorphins that Trump believes he is entitled to for winning in 2024.
And I gotta be honest, the carrot danglers don't seem to have a prosperous and thriving democracy in mind as one of their goals lol
There's a version of smart that they may be, but it's not a version of smart that is generally a parent of children they care about.
The future they're creating, no matter how much money they have and pass on, is going to be worse for their children and grandchildren. That's not smart, that's incredibly selfish and, regarding biological legacy, self-defeating.
How much of it is "the current administration" and how much is simply the continuation of a much longer trend? The US has been at war with this or that country in the Middle East for as long as I'm alive and I'm almost 40. Same with tax cuts, high spending and so on. It's easy to blame everything on Trump (or Reagan), but it seems to be a much broader issue with the whole system
Yes, this has been going on a long time. However, I think there is quite a bit of data about who is in charge or the White House and Congress when taxes go down/up or the deficit goes down/up, etc. It doesn't take more than one online search to see a very distinct pattern.
And yet every single Fox talking head says the opposite, resulting in half the country thinking it's Democrats responsible for the deficit. Propaganda is magic.
Thank you. Could you please point me to the source?
Source: https://www.whitehouse.gov/omb/information-resources/budget/...
I found this under the same domain: https://www.whitehouse.gov/lab-leak-true-origins-of-covid-19..., weird.
Let's count our blessings that the ongoing campaign to fill whitehouse.gov with Republican partisan hackery doesn't extend to the boring accounting parts. Yet.
Clinton balanced the budget. There was a surplus. Go read Articles from the 90s there was fear that we would pay down the debt too fast and it would harm the economy.
Obama was on tracy to reduce the deficit and likely would have had the financial crisis not required stimulus.
Biden was using debt to invest in infrastructure and things like power generation that would yield returns unlike tax cuts that just exacerbate wealth concentration and inflation by asset appreciation due to capital chasing the same assets.
It’s not symmetrical one party is driving this and the irony is that they are the “fiscally responsible” party.
No amount of discipline is possible for democrats if every time they balance the budget republicans use the savings to cut taxes further.
Biden also had to respond to the deflationary risk of the Covid pandemic.
Printing hundreds of billions of dollars is also inflationary. Governments change but the impact of all this takes a very long time to flow through the economy.
> Printing hundreds of billions of dollars is also inflationary.
Borrowing hundreds of billions, but yes, inflationary is the point of doing it.
The vaguepost by Bessent in today’s Financial Times looked pretty weak: https://www.ft.com/content/cb865200-1a06-40be-86a3-10ee2bb05...
He sounds like an extortionist. I particularly liked the reference to "America's tolerance."
https://archive.ph/2026.08.24-074023/https://www.ft.com/cont...
They’re just lining up the Xth once in a lifetime crisis for millennials…
All that has to happen to fix this is taxes. The ultra rich tax's need to be raised to a level the US had before Reagan. Instead the people running the US want the poor and middle-class to pay for everything and enrich the rich even more.
Until that is fixed, the US will end up as a banana republic with lots of nukes.
> rates on mortgage loans and other long-term lending across the economy – are walloping his popularity, helping freeze the housing market
Looking like 2007 again ? The GOP loves flirting with creating a massive depression.
2007 was very different. There was an entire industry propped up by artificially manufactured speculative demand. This was a real industry that produced loads of jobs,drove downstream industries and had significant involvement from a huge portion of the population.
Thank you for describing AI.
Once again, I'm begging you, with tears in my eyes to learn the difference between statutory and effective tax rates. Do I disagree that there were headline rates of 70%? No. Did anyone pay those rates on any meaningful amount of their income? Also no.
> All that has to happen to fix this is taxes. The ultra rich tax's need to be raised to a level the US had before Reagan.
What was inflation like before Regan?
Inflation was really solved when Volker raised the interest rates. Nixon, Ford, Carter all struggled with rising prices.
Strange enough, I was alive back then and clearly remember my grandmother applauding Nixon's attempt to 'freeze prices'. Did not work.
The numbers published by the government may not reflect how it is felt in the populace. I think the current inflation is 'worse' than the 1970's. One thing is that wages were getting bumped all the time to compensate; not something we see today.
Strong agree. Raise taxes for everyone (except those at the bottom, please). Draw the line wherever you want, we can argue about where, but it has to be drawn.
What does inflation have to do with the tax rate for the wealthiest? Also, IIRC I read the climate cooled a little in the 1970s - can we attribute that to the tax rate too?
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 impossible, therefore the deficit has to be paid down some day.
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.
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)
Most money is created by the private sector. Thats was fractional reserve banking is, creating money.
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)
For anyone not aware just how much: A quarter of it. A quarter of all US debt happened under Trump.
remember the utter destruction of the economy by the Bush administration?
everyone was so relieved when he was finally flown away for the last time by Marine One, he couldn't do any more damage
well this is round two, just keep voting for this kinda of garbage corruption
pray for a full impeachment because otherwise two more years is going to leave a burning dumpster fire of a country (but Vance maybe even worse)
his drapes! his golden statues! his ballroom! his ARC! his helipad! his flagpoles!
his image on passports, gold coins, $250 bill, park passes! 100 foot banners of his image on federal buildings!
renaming warships and airports after him while still in office
ONE BILLION DOLLARS in taxpayer funded renovations for all his nonsense in DC
ANOTHER BILLION DOLLARS stolen from nuclear missile maintenance for his QatarForceOne
$6 Million per day in pardons and other grift
$2 Million every weekend for his golf outings
go on, tell me any other administration from any party was ever this insanely corrupt
now imagine what else he is doing to the country, selling federal land, got the CIA mucking around in Greenland and who knows where else
and he's definitely doing Cuba after November
This is round three. Half the electorate saw round two and said, “more of that, please.” That’s why we’re fucked, not because of the particular idiot they chose.
Half of America thinks the only way to solve Republican-caused disasters is to elect more Republicans
A garbage article. Yields went down after the housing bubble in 2007 because the central bank interest rates were lowered, not because the investors decided to flock to a safe asset.
Yields are high because the inflation is also running high and it doesn't like it will come down anytime soon so the central bank interest rates will also be kept at a higher level.
Long term bonds can be replaced with short term bonds which are constantly rolled over. The bond yields are pricing in the future interest rates, nothing more.
Treasury interest rates just decoupled from bond yields. That's the news.
They were only coupled in the first place because treasuries were seen as the safest of havens. That means everything else had to pay more interest than them. So is that no longer the case?
The last Fed meeting saw high inflation and decided not to adjust interest rates, with the stated reasoning that the market will fix it by itself. This could be how the market fixes it by itself.
Check out the federal funds rate over the last 5 years: https://fred.stlouisfed.org/series/fedfunds
Vs the 30 year bond yield: https://fred.stlouisfed.org/series/DGS30
That’s the news. The fed is desperately trying to get interest rates lower, but the free market isn’t buying it. The treasury is also pulling out some very desperate moves to control this, like selling euro for JPY without even telling the EU, we will see how it works out.
30 year old bond yield being 1-2% above the short term yield is nothing unusual
Their point is directional. Fed is lowering rates but yields are rising.
selling stocks and buying bonds in a recession where interest rates go down (so bonds are priced higher) and expected revenue for most sectors go down is a no brainer.
Agree, but there's also the expectation of future debt. A bigger debt means a bigger issuance of bonds, so the new supply-demand equilibrium moves the rates higher as it's the only way to convince investors to allocate more to bonds.
Technically, yes, but if you create demand for long term bonds and create supply for short term ones, you'll flatten the yield curve and pay long term yields for short term durations.
We are in a different phase of Capitalism, real interest rates will be kept low mechanically. Nominal Inflation rate will always be lied about. Bonds holders will lose value by design.
The governments and central banks across the world have no other choice. Corporations and big money have robbed our world of capital and are now changing the game to pull up the ladder behind them