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- Hacker News
- In a world of continuous population growth, there is some excuse (but not justification) for running governments at deficit, which is essentially a bet that future generations will produce enough to meet their needs and fulfill debt obligations from past generations. When population growth halts, so should deficit spending. Smith himself, in The Wealth of Nations: "What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom."by hliyan
- All countries somehow are struggling at the same time. I don’t think we have seen something like this in the recent history.
Maybe we collectively just over-lend at very high interest rates and the real economy cannot anymore catch up with the promises?
by whatever1 - It probably doesn't help rates to spike oil prices by starting a(nother) war of choice in the middle east while inflation is already running hot. Eventually you get demand destruction and outstanding debts don't look so good.by state_less
- Stocks keep marching higher. And it's not irrational. Because the only way out of this mess (debt with high rates) is inflation.by gradus_ad
- My knowledge of new-gen-econ is pretty subpar, but isn't the strategy of US "don't dare to bet against us, we're writing new rules of the game"? It feels like all governments are acknowledging "letting it rip will suck for everyone, so why would we even bother". Normal monetary policy has been thrown out of the window, and every large state bank has stated it very openly throughout the wars that have started in this decade. And this leads to a lot of state-level financial backdoor discussions, deals and "stuff" that I'm not knowledgeable enough to even think about.
Wild times. Maybe it's information overload, since it probably happened in the past as well. But being bombarded with implications of these changes left and right is kinda weird.
by tokioyoyo - The primary issue is Social Security. It’s the biggest driver of spending, and nobody wants to do anything to cap its costs such as means testing or straight up lowering the amount it can pay out.
As for the people that will inevitably bleat about how this is just horrible and we need to lift the cap on taxable SS income, that wouldn’t solve the core problem either unless you pair it with spending caps or cuts.
by GenerWork - You want to see what's really bad, a train wreck in slow motion, just look at what France is doing.
They've been subject to EU Excessive Deficit Procedures for multiple years, must bring deficit-to-GDP ratio from ~5.8% down to 3% within 3 years despite virtually no GDP growth and complete political and societal paralysis about reducing any public benefit or welfare whatsoever.
ECB will most likely get involved after 2029 to start austerity measures. You can predict how that will go over with the French public especially if Le Pen takes the presidency, which looks likely.
Very tough times ahead and the EU is facing a critical point about its future.
by petcat - In 2026, entitlement spending + interest expense will be over 100% of federal tax revenue.
That's before the military, foreign aid, and everything that starts with "Department of"
by missedthecue