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0 pointsroenxi3y ago0 comments

You're a lovely bloke. I don't care about your mortgage.

Describe to me, in concrete terms, ideally using the names of the politicians you think might be involved, the voting demographics, the years and values, etc, how you think the US is going to make a start on paying down its debts in real terms.

We all know what is going to happen. They're taking in real resources, they're going to give a lot less back and pretend there is a meaningful difference between not paying off all the debt and defaulting on debt. Which there is not.

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ceejayoz3y ago

> Describe to me, in concrete terms, ideally using the names of the politicians you think might be involved, the voting demographics, the years and values, etc, how you think the US is going to make a start on paying down its debts in real terms.

The US will continue to carry a debt load. With inflation and a sub-3% borrowing rate, it's essentially free money - we pay $400B a year in interest to access $30T. Again, we've done this for hundreds of years; it's not gonna suddenly stop being a functional bit of monetary policy.

By the end of my loan, my mortgage payments will be worth a lot less in real money, too - $1k ten years ago and $1k twenty years from now aren't the same. Creditors price this in from the beginning, whether it's my mortgage or a trillion dollars in US government bonds.

> pretend there is a meaningful difference between not paying off all the debt and defaulting on debt

This is just a silly statement. I don't think we can have a rational conversation about monetary policy if you think that.

roenxiOP3y ago

> The US will continue to carry a debt load.

No, no, that part no contest.

How you think the debt load might shrink without the US defaulting. How do you think this will happen? When? Who? Real-world specifics, a plausible scenario that you think might play out. How does the debt get smaller? What is going to change that hasn't been the case since the 70s?

And why will the US not just default in preference to of attempting to do the impossible when those conditions change?

> This is just a silly statement. I don't think we can have a rational conversation about monetary policy if you think that.

Reason it out for me, I'm obviously struggling to understand you. What do you think the difference is between borrowing a large amount, returning a small amount and claiming it isn't a default? Why do we have the word default if that isn't a default?

If that is a better option than a default, why don't all the debtors do that instead of defaulting?

ceejayoz3y ago

The definition of default is to not be able to make loan payments. It's something the US has never done, and isn't considered likely to do in the forseeable future. The largest risk the US has in this regard is political; politicians occasionally use the routinely-raised statutory debt ceiling as a game of chicken.

> How you think the debt load might shrink without the US defaulting.

It won't, and it doesn't have to. We pay off a trillion on-time, we borrow another. As long as we make payments as required, no one gives a shit.

> And why will the US not just default...

Because then we stop being able to borrow when we want to, like Argentina.

> What do you think the difference is between borrowing a large amount, returning a small amount and claiming it isn't a default?

We borrow a large amount, and return a small amount lots of times, paying down both some principal and a little interest. Again, just like a mortgage.

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ceejayoz3y ago

> pretend there is a meaningful difference between not paying off all the debt and defaulting on debt

This is just a silly statement. I don't think we can have a rational conversation about monetary policy if you think that.

roenxiOP3y ago

> The US will continue to carry a debt load.

No, no, that part no contest.

And why will the US not just default in preference to of attempting to do the impossible when those conditions change?

> This is just a silly statement. I don't think we can have a rational conversation about monetary policy if you think that.

If that is a better option than a default, why don't all the debtors do that instead of defaulting?

ceejayoz3y ago

> How you think the debt load might shrink without the US defaulting.

It won't, and it doesn't have to. We pay off a trillion on-time, we borrow another. As long as we make payments as required, no one gives a shit.

> And why will the US not just default...

Because then we stop being able to borrow when we want to, like Argentina.

> What do you think the difference is between borrowing a large amount, returning a small amount and claiming it isn't a default?

We borrow a large amount, and return a small amount lots of times, paying down both some principal and a little interest. Again, just like a mortgage.

1 more reply

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