Math is fun: US economy prediction by David Schweikert (R)

[NWRMidnight]

Seems like he's on a different trajectory this time, guess we'll know in 4 years.

The trajectory he is on, is going to surpass his previous terms deficit spending by a substantial amount. If he was legality looking for ways to cut spending, why is he pushing for the debt limit to be raised, which the republican Congress is working to do?

 

[fskimospy]

They’re wrong until they’re right, and they will be right eventually.

When Does Federal Debt Reach Unsustainable Levels? — Penn Wharton Budget Model

PWBM estimates that---even under myopic expectations---financial markets cannot sustain more than the next 20 years of accumulated deficits projected under current U.S. fiscal policy. Forward-looking financial markets are, therefore, effectively betting that future fiscal policy will provide substan

budgetmodel.wharton.upenn.edu

This is exactly what they have been saying for roughly a half century of being wrong.

At some point people should just admit it.

 

[repoman0]

This is exactly what they have been saying for roughly a half century of being wrong.

At some point people should just admit it.

Most of them are just making things up, the Penn study is not. It will eventually become a problem and we should fix it now rather than deal with more pain down the line. Otherwise we’re just continuing to do what the baby boomers did — tax cuts with all the benefits for themselves followed by a rug pull.

 

[soulcougher73]

LOL bitching when you keep voting for the people who blow the deficits to hell to fund tax cuts to the oligarchy every single time they get elected.

He is Charlie Brown. Every....single...time.

 

[fskimospy]

Most of them are just making things up, the Penn study is not. It will eventually become a problem and we should fix it now rather than deal with more pain down the line. Otherwise we’re just continuing to do what the baby boomers did — tax cuts with all the benefits for themselves followed by a rug pull.

Many, many people, even people who thought they were not making things up, have made the same claims and have been wrong over and over.

The boomers’ rug pull had nothing to do with fiscal needs, it was simply a policy choice on their part where they decided they no longer wanted to support their children the way their parents did.

Social security does have long term solvency problems but they are easily solved, especially if we adopt a sane immigration policy.

When a prediction proves not just wrong but almost ludicrously wrong for decades at some point we should all just accept reality that it is wrong.

 

[repoman0]

Many, many people, even people who thought they were not making things up, have made the same claims and have been wrong over and over.

The boomers’ rug pull had nothing to do with fiscal needs, it was simply a policy choice on their part where they decided they no longer wanted to support their children the way their parents did.

Social security does have long term solvency problems but they are easily solved, especially if we adopt a sane immigration policy.

When a prediction proves not just wrong but almost ludicrously wrong for decades at some point we should all just accept reality that it is wrong.

Cool, infinity debt:GDP here we come.

 

[fskimospy]

Cool, infinity debt:GDP here we come.

What’s both sad and annoying is that 30 years from now the exact same people are going to be saying the exact same things with no acknowledgement of closing in on being wrong for a century straight.

Even more annoying is when pressed in the past to identify when this crisis would happen people made predictions! When they were wrong they didn’t say ‘I was wrong’ - they just moved the predictions forward. I mean look at basically 2008 to 2016.

‘They are wrong until they aren’t’ is an implicit acknowledgement of this, just with the idea that even though a theory’s predictions are always wrong the theory is nonetheless right, which is…curious.

 

[fskimospy]

Also this thinking hasn’t just been wrong, it has been hugely damaging and has contributed to our current situation.

When the US was bordering on deflation the debt hysterics insisted on huge budget cuts that badly damaged growth, based on the wrong idea that we were near some sort of debt crisis. Pretty good chance had that never happened that Clinton wins in 2016.

 

[repoman0]

What’s both sad and annoying is that 30 years from now the exact same people are going to be saying the exact same things with no acknowledgement of closing in on being wrong for a century straight.

Even more annoying is when pressed in the past to identify when this crisis would happen people made predictions! When they were wrong they didn’t say ‘I was wrong’ - they just moved the predictions forward. I mean look at basically 2008 to 2016.

‘They are wrong until they aren’t’ is an implicit acknowledgement of this, just with the idea that even though a theory’s predictions are always wrong the theory is nonetheless right, which is…curious.

“The theory” is that there is a level of debt under which a government crumbles under the weight of its interest payments. This is somewhere above where we are now and somewhere much less than infinity. I have no idea what that number is. Maybe we don’t get there in my lifetime, or maybe people and governments stop buying US bonds.

Maybe we can just artificially increase the denominator exponential growth by inflating it away when and if that happens. I don’t think that will be very popular.

I personally find it annoying that because the GOP started crying wolf long before I was born, we can’t just acknowledge that math exists.

 

[sandorski]

"Lockbox"

 

[Fenixgoon]

“The theory” is that there is a level of debt under which a government crumbles under the weight of its interest payments. This is somewhere above where we are now and somewhere much less than infinity. I have no idea what that number is. Maybe we don’t get there in my lifetime, or maybe people and governments stop buying US bonds.

Maybe we can just artificially increase the denominator exponential growth by inflating it away when and if that happens. I don’t think that will be very popular.

I personally find it annoying that because the GOP started crying wolf long before I was born, we can’t just acknowledge that math exists.

Sure eventually the interest on the debt becomes a problem - if taxes aren't increased accordingly. And somehow, America always seems to cut taxes rather than raise them....hmmmmmmm

But being the reserve currency of the world, most debt being held by Americans and not foreign creditors, and being able to print its own money - America's debt situation is also vastly different than other countries'

 

[repoman0]

The CBO at least seems to acknowledge that math exists. Interest payments projected to be 6.3% of GDP inside of 30 years, ouch. I believe these numbers assume the TCJA cuts are allowed to expire, lol.

“That mounting debt would slow economic growth, push up interest payments to foreign holders of U.S. debt, and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel more constrained in their policy choices.”

The Long-Term Budget Outlook: 2024 to 2054

The federal budget deficit increases significantly in relation to gross domestic product over the next 30 years, in CBO’s projections, pushing federal debt held by the public far beyond any previously recorded level.

www.cbo.gov

 

[repoman0]

But being the reserve currency of the world, most debt being held by Americans and not foreign creditors, and being able to print its own money - America's debt situation is also vastly different than other countries'

Agreed, and this is the primary reason the wolf criers have been wrong so far. It can’t go on forever though. Trump and Co are also doing everything they can to ruin the huge advantage of the dollar as the main reserve currency.

edit: they were also wrong because we’re still on the relatively flat linear-ish part of the exponential.

 

[biostud]

You still have a bit of line until you reaches Japan's 263% debt of GDP...

National debt of Japan - Wikipedia

en.m.wikipedia.org

 

[SteveGrabowski]

What’s both sad and annoying is that 30 years from now the exact same people are going to be saying the exact same things with no acknowledgement of closing in on being wrong for a century straight.

To be honest thirty years from now we'll probably be in some kind of civil war over water thanks to the unchecked march of global warming that was already beating out some of the most pessimistic projections before the Republicans took power. I feel bad for all the people getting suckered into buying homes in Phoenix right now when they'll be worthless by the end of their mortgage in 30 years when the city is out of water. Makes me face palm every time I see it's one of the fastest growing metros in the US.

 

[[DHT]Osiris]

Sure eventually the interest on the debt becomes a problem - if taxes aren't increased accordingly. And somehow, America always seems to cut taxes rather than raise them....hmmmmmmm

But being the reserve currency of the world, most debt being held by Americans and not foreign creditors, and being able to print its own money - America's debt situation is also vastly different than other countries'

I'd take conservative gnashing of teeth over debt seriously if they ever actually did anything about it. Every time conservatives get elected they cut taxes on those with money, drive the debt up further, then blame Democrats.

 

[fskimospy]

“The theory” is that there is a level of debt under which a government crumbles under the weight of its interest payments. This is somewhere above where we are now and somewhere much less than infinity. I have no idea what that number is. Maybe we don’t get there in my lifetime, or maybe people and governments stop buying US bonds.

Maybe we can just artificially increase the denominator exponential growth by inflating it away when and if that happens. I don’t think that will be very popular.

I personally find it annoying that because the GOP started crying wolf long before I was born, we can’t just acknowledge that math exists.

I think the larger problem is that logic exists and the debt hysterics keep trying to wish away logic. This is because government debt is nothing like personal debt.

If you would like to explain why you think the US government, the representative of the US people, will crumble under the weight of debt that is overwhelmingly owed to the US people I’m open to hearing it. Are we somehow bankrupting ourselves? If you loaned your wife a kabillion dollars is your household collapsing under the strain of interest payments one half of your household is paying to the other?

It is true that there is some level of (EXTERNALLY) held debt that would cause problems for the US. What we do know though is that all predictions as to the US being even remotely close to that have been wildly, almost comically wrong.

It wasn’t even difficult to tell these predictions were wrong at the time - it was obvious and plenty of people pointed out why it was obvious. Debt hysteria is primarily the result of people clinging to economic models they can’t admit are wrong.

 

[repoman0]

I think the larger problem is that logic exists and the debt hysterics keep trying to wish away logic. This is because government debt is nothing like personal debt.

If you would like to explain why you think the US government, the representative of the US people, will crumble under the weight of debt that is overwhelmingly owed to the US people I’m open to hearing it. Are we somehow bankrupting ourselves? If you loaned your wife a kabillion dollars is your household collapsing under the strain of interest payments one half of your household is paying to the other?

It is true that there is some level of (EXTERNALLY) held debt that would cause problems for the US. What we do know though is that all predictions as to the US being even remotely close to that have been wildly, almost comically wrong.

It wasn’t even difficult to tell these predictions were wrong at the time - it was obvious and plenty of people pointed out why it was obvious. Debt hysteria is primarily the result of people clinging to economic models they can’t admit are wrong.

Something like 30% of US debt is held by foreign countries and increasing. Don’t take my word for the problems it will eventually cause, the CBO report I linked did a nice job.

As for the problems with the part of the debt that’s owed to ourselves, one that comes to mind immediately is most people who actually buy and own treasuries are rich, so it could act like upward wealth transfer over time. The rich make a couple percent on top of inflation with their excess millions and the poors (lack of) wealth gets inflated away.

 

[repoman0]

To be honest thirty years from now we'll probably be in some kind of civil war over water thanks to the unchecked march of global warming that was already beating out some of the most pessimistic projections before the Republicans took power. I feel bad for all the people getting suckered into buying homes in Phoenix right now when they'll be worthless by the end of their mortgage in 30 years when the city is out of water. Makes me face palm every time I see it's one of the fastest growing metros in the US.

Think about the amount of money we could spend instead on e.g. solar power rollouts if we weren’t still paying interest on the debt that financed the ten trillion dollar Iraq war.

 

[fskimospy]

Something like 30% of US debt is held by foreign countries and increasing. Don’t take my word for the problems it will eventually cause, the CBO report I linked did a nice job.

I’ve read it before! The CBO also has a history of wildly wrong predictions on this front.

Again, I struggle to understand why we continue to listen to people who have definitively proven they don’t understand this as evidenced by being wrong over and over.

As for the problems with the part of the debt that’s owed to ourselves, one that comes to mind immediately is most people who actually buy and own treasuries are rich, so it could act like upward wealth transfer over time. The rich make a couple percent on top of inflation with their excess millions and the poors (lack of) wealth gets inflated away.

That’s a policy issue, not a fiscal issue.

 

[fskimospy]

Think about the amount of money we could spend instead on e.g. solar power rollouts if we weren’t still paying interest on the debt that financed the ten trillion dollar Iraq war.

Most of that interest is paid to ourselves so there’s no loss of ability to do that.

 

[fskimospy]

I think at a minimum what needs to happen is for people making this debt warning now is they should come out and admit to being wrong in the past and then specify what was wrong about their model then that they have since corrected and why it was wrong.

I mean imagine this in any other context. If your stock broker constantly picked dog stocks while promising you they were going to be great and then came to you with a great stock pick would you believe them? Of course not. At a minimum you would want to know why they did such a bad job before and what they changed.

 

[repoman0]

Most of that interest is paid to ourselves so there’s no loss of ability to do that.

And 30% and rising is going overseas. What percentage of US GDP going from taxpayers to foreign creditors is acceptable to you?

 

[sdifox]

And 30% and rising is going overseas. What percentage of US GDP going from taxpayers to foreign creditors is acceptable to you?

Whut? Bonds have fixed interest rates. The crap Donny is doing is going to push up US Bond yield rate.

 

[repoman0]

Whut? Bonds have fixed interest rates.

🙄 yes, that has nothing to do with my statement that 30% of the federal debt is held overseas.