[ 3 / biz / cgl / ck / diy / fa / ic / jp / lit / sci / vr / vt ] [ index / top / reports ] [ become a patron ] [ status ]
2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance

View post   
File: 38 KB, 498x131, debt.png [View same] [iqdb] [saucenao] [google]
57632832 No.57632832 [Reply] [Original]

Is debt even real? What's the point of the government sucking up resources and leaving an IOU when it's never going to pay?

>> No.57632858

Didn't we just cross 34 trillion like 3 weeks ago?

>> No.57632861

>>57632832
The government is quite literaly stealing from you and theres nothing you can do about it.

>> No.57632881

>>57632861
It gives to the older generations and expects the young ones to pay it back.

>> No.57632957

>>57632832
Debts sells for the purpose of turning slush into a predictable income stream. Better to plan that way. Debt of course is taken to finance expenditures. It is cheaper to service interest than to pay outright. They're not doing you a huge favor, they're more like single fisting you vs double fisting but the effort is there.
Public debt is not like private debt. You die fast, nations don't and can take 100 year terms.
It gets a little more complicated with the politics but the point is all the same as consumer financing.

>> No.57632977

>>57632881
What that mean tho?

>> No.57632989

Who cares, retard? It's all made up money anyway. They could literally print 35 trillion at this very moment and pay all that debt.

>> No.57633123

>>57632832
Not only are they paying it back, they are also paying interest on it.
>>57632989
That's the idea, but they can't do it all at once because it will cause instability and loss of trust. The idea is to constantly print at manageable amounts to maintain a certain ratio of debt to GDP.

>> No.57633159
File: 74 KB, 1000x1000, t9fy2pdsjq331.jpg [View same] [iqdb] [saucenao] [google]
57633159

>>57632832

All national governments are broke. It's like in the cartoons when someone doesn't fall off a cliff until they realize there's no floor below them.

>> No.57633255

>>57633123
isn't the ratio of debt to gdp increasing though? and in the event of an economic downturn prompted by geopolitical events or an unforeseen recession that could change drastically for the worse? especially if interest rates were forced to continue increasing instead of pivoting?

>>57632989
wouldn't that have a pretty negative effect on the strength of the dollar though? it might accelerate the process of de-dollarization by nations choosing to transact in digital versions of national currencies through multi-CBDC systems like mBridge and the ones BRICS are creating

>> No.57635205
File: 364 KB, 977x745, 1623557584380.png [View same] [iqdb] [saucenao] [google]
57635205

>>57632832
i got in a debt to buy $SPX last week and shit got a 3x, so I paid it and got a $5000 profit, so this is not a problem for me

>> No.57635503

I've finally realized debt is a control mechanism (((they))) use to maintain the financial hegemony. There can be no hyperinflation because they'll threaten to implode debt and credit.

>> No.57635641

>>57633123
>Not only are they paying it back, they are also paying interest on it
They're paying interest on it, but they're not paying it back. They continue to add to the debt.

>> No.57635659

>>57633255
>Isn't the ratio of debt to gdp increasing though?
It is, and its increasingly government spending, so that GDP isn't even taxable to prevent more debt.

>> No.57635855

>>57632977
E.g. boomers splurged all of their money that they had and passed that IOU onto the younger generations who now have to pay their social security and medicaid.

>> No.57635874

>>57632832
the debt has a catch: the emission of US treasuries has a demand for now
if demand is cut, say goodbye
it also doesn't help that deficit spending just rekts your country even further, giving money to the government is like giving fireworks to a brat with no parents

>> No.57635927

>>57632832
Debt is how you manipulate weak countries. Infiltrate them, get their shit leader to take out debt and funnel it back to yourself. When that leader is overthrown, you strong arm the next leader with the old debt

>> No.57635947

>>57632832
currency is issued as debt. it's all fake bull crap

>> No.57636528

>>57633255
>isn't the ratio of debt to gdp increasing though?
Yes, and the more it increases, bond buyers will ask for higher interest rates.
>>57635641
They are paying back older "loans" while taking new "loans". Yes the total debt is increasing, but people who bought bonds are still getting their money back. Eventually people will start asking a higher interest on the bonds because they see it as a greater risk. The US government (and most western countries) are playing with fire by increasing their debt on the idea that the economy will grow and more taxes will be raised as a result. Japan is a proof you can raise debt up to over 260% of GDP and still be a functioning economy, and in their case the population is shrinking. I think the US can afford even 300% debt to GDP ratio.

>> No.57636979

>>57636528
Yes the US can probably afford to go to a way higher debt to GDP ratio. After all, as long as you can pay the interest rates, the central bank can just print money out of thin air and use it to buy government bonds. Yes this is not a joke, that's really how it works. Central banks can literally print magically print money that everyone else has to work for, and use it to buy real goods and services. Yes this bullshit can keep going for a while, but eventually its all going to come down very very hard. This bullshit is the reason stocks are still pumping while the real economy is in the shitter. It doesn't make any sense, until you realize this whole thing is just a big mechanism to transfer wealth from the middle class (which barely exists anymore) and the poor to the super rich who own all the politicians. Long story short, this is why Bitcoin and crypto is unironically necessary. Not central bank, no funny money bullshit manipulation which inevitably leads the currency to go to ZERO.