By traditional indicators the US is broke. Debt to GDP is at historic crisis levels, debt service is eclipsing the military budget (though I didn't check if that includes the spending for the war in Ukraine) and it is unclear where the oomph to pay for retirees will come from. The main thing optimists seems to be pinning their hope on is that the authorities can print money and it will all turn out OK.
What is the conversation around science funding meant to look like? Spending money on productive investments is a great idea, but the practice of the US government is nowhere near that.
What is the conversation around science funding meant to look like? Spending money on productive investments is a great idea, but the practice of the US government is nowhere near that.
This year's Nobel prize for chemistry went to three Americans (edit: I was mistaken, one of them was living in the USSR when his initial discovery was made, though he now lives in the US). Both the winners of the Nobel prize in medicine were American. and one of the three winners of the Nobel prize in physics was American. By what metric are we "nowhere near" productive in how we fund research?
By what metric are we "nowhere near" productive in how we fund research?
Spending as a % of budget. I feel that was obvious given the article.
I suspect you're reading something that I didn't write though - I'm just pointing the US government doesn't have spare money lying around to increase their funding of science projects. It isn't a case of "oh we'll just budget a bit more for science". There are enormous cuts/tax increases needed before that conversation can even begin.
Debt to GDP has no meaning as one is a balance and the other is a balance over a time. A better indicator will be Debt to GDP until the year infinity. Same goes for military budget, it’s for a year.
What measure do you want to use? Given that debt has been consistently trending up faster than GDP for a while ... I dunno, couple of decades? ... Debt:GDP until year infinity is also quite concerning (we could reasonably project a ratio of infinity unless policy changes - ie, the US is at crisis levels).
I wouldn’t compare my $400k debt with my monthly income. I’d compare my monthly income vs my mortgage payment and my investment incomes. Same goes for the government, divide debt by number of years needed to pay it off including interest subtract the earnings from economic activity and interest earning from giving out loan to other entities and the see if GDP is able to counter that
I'm not sure what you're wanting to angle for here, that doesn't seem like a specific formula. If you're trying to calculate a single metric it seems to be number of years to pay off the debt? At current trend, that is infinity years. I'm not seeing how it could get worse than that, although no plans to pay back the debt is just business as usual by now. And I suspect the information in your sentence is actually contained in a Debt/GDP ratio (eg, is interest + GDP growth going up faster than debt implies Debt/GDP ratio dropping).
I wouldn’t compare my $400k debt with my monthly income.
Pretty sure that is actually a fair way to assess your creditworthiness. I can see the conversation in the bank going "Yo I want $400k", "What is your income?", "$X", "Yea"/"Nay" with some basic due diligence.
It’s so clear this isn’t sustainable.
Maybe. Having that much debt is problematic in a household budget. However, governments are a different animal - just look at Japan's debt to gdp ratio (https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/...). Posters who claim the US Gov's debt is strangling the nation are obligated to explain why Japan hasn't imploded. The likely real answer: nobody knows what levels of debt are sustainable for a government.
Japan can't sustain a bunch of things that the US can and has a substantially lower GDP per capita. They aren't a counterexample to US debt being a problem - calibrating to follow Japan's example will involve the US dialing back its spending.
OK. Let's take the U.S. out of the equation and look at Japan's inflation - https://tradingeconomics.com/japan/inflation-cpi.
Hmmm... you'd expect with the 'unsustainable' government spending in Japan that there would be an uptick in inflation. There's nothing of the sort - unless my eyes are lying to me. And this goes back to my second point - nobody really knows what levels of government spending are sustainable, and my guess, given that it's not just Japan with a high debt/GDP ratio, that it's likely a much larger number than some posters here would like to admit.
US debt repayments are similar to their military budget, and their military budget is designed to hold down China (rival superpower) and Russia (possesses a global threat nuclear arsenal, with whom they are actively at war with) and a few other countries.
I'll happily agree that the limit is unknown and it might be higher than anyone expects - but at the current trajectory we're all going to find where it is as the US hits it face-to-wall-at-speed style. Years ago we crossed the limit where that debt was never going to be repaid in real terms. Now we're getting to levels where even the interest probably isn't going to be paid back in real terms.
And, in amongst this, it isn't really clear what the debate around science funding is supposed to look like. The US appears to be going broke. It'll probably struggle to find the money for big spending on science over the next few years. Even if they execute some sort of default they're still going to have to do a round of belt tightening.
I'm actually not as opposed to belt tightening as you might think. I just get aggravated seeing narratives without a whiff of empirical evidence to support them. (I've informally studied economics and probably know enough to be dangerous.) My personal indicators that we may be on shaky fiscal ground are the rise of monopsonies/monopolies in vertical markets that depend on discretionary income (concert tickets anyone?) and the most troubling chart I've ever seen from the BLS (Bureau of Labor Statistics) https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.ht... (scroll to the bottom and look at the last chart).
At risk of belabouring the point [0]; but the empirical evidence is that debt/gdp is an a clear uptrend. Initially when the debt was taken on, the justification was that economic growth would be fast enough that it'd not need to be paid back. That didn't happen. Then the narrative shifted to the point where ok well the debt isn't going to get paid back as such but that doesn't matter because the government can just pay the interest and roll the debt over. Now that isn't working. The justification is shifting to "well ok the US can't pay the principle or the interest but that is OK because it is a government but it can print money and force people to go along with the spending, maybe declare that lenders don't get paid back but don't call it a default?".
Waiting for more empirical evidence that this will break everything is not a great strategy. By the time the evidence is in, everything will be broken and the US will be deeply in debt. The US is already acting like an economic system under significant stress (prosperous people don't elect Trumps). When the dust settles it'll probably turn out that there were huge costs to the debt and they just didn't turn up as inflation (for example, if people literally can't afford something, then price inflation won't matter).
Japan having high debt and the US having high debt is no evidence at all that the US will end up like Japan. They've got completely different laws and people. Plus the median Japanese income is something like 80-60% of the median US income [1] so that is hardly an economic outcome to aim for.
[0] Started out with "Noy wanting to" but I figured that couldn't be true.
I've always assumed it is that the trends are damn scary and people don't want to think about them. Most people struggle with financial concepts like (earning >= spending -> good outcomes) and I assume at the root it is some combination of emotional responses that just don't want to tackle the uncertainty of the future.
If you look far enough out, the future is scary. If nothing else eventually we get hit by a meteor. So people generally don't look forward more than a week or few - because it is unpleasant and seems a little pointless. They live with whatever seems like a good idea right now. I just wish they'd let people who are a bit more math-oriented take on budgeting decisions. We're going to be eating consequences that we didn't have to because the US public can't sit down and agree that solvency is more important than whatever distraction came up this electoral cycle.
Home economics and nation-state level economics are entirely, qualitatively different, not just different scales of the same thing, and people who think they're clever by comparing the two are insufferable. Global superpower economies are even more so.
A government collecting more tax revenue than they spend is a sign things are going terribly wrong. Best case scenario it means they were temporarily, inadvertently overtaxing everyone. The government "printing money", and thus creating some level of inflation, is a good thing. Deflationary economies are failing economies.
By far the biggest difference is that to you, money and debt are real. If you don't have enough money, you can't pay for the things you need. If you have too much debt and can't pay, people will show up and commit violence against you. At the sovereign nation-state level ("sovereign" excludes countries that gave up control over their money supply to disastrous effect, like Greece), money and debt are far less concrete. Debt represents "buy-in" on your monetary system: If people and nations are owed money from a country, they have a vested interest in that nation's continued economic prosperity. Money is an infinite resource to a sovereign nation: it can simply print more. Via taxation, they effectively destroy money, since Infinity + 1 still equals Infinity. Thus, money from a nation-state's perspective isn't about balancing the books, it's about controlling the flow.
In point of fact the US public has literally no control over budgetary policy so perhaps pointing the finger at the culprits instead of the useful idiots that put them there would be worthwhile.
It be not so! The US public has been surreptitiously cheering the madness on. I'm sure they'd agree with fiscal conservatism in principle - but ask them to support tax hikes? No way to win an election. Ask them to support budget cuts? Literally nothing on the table.
I've been arguing the fiscal responsibility side on HN for a long time. There is nearly no government program where a strident call for fiscal conservatism won't get a comment downvoted. It is a needle-threading exercise to make any points in favour of not spending money; it takes a lot of care, practice and timing to argue without kicking one of several hornet nests. And that in on HN where the crowds are more reasonable and logically minded.
the culprits instead of the useful idiots
The useful idiots are the culprits. Being an idiot doesn't absolve someone of responsibility.
If you don't have sources, the sensible target is 0. Projects should be funded on an as-makes-sense basis and paid back. Or if you have some reason to pick a different target then sure, do that.
The issue at the moment is that the ratio is trending upwards until something breaks. And debts are hitting levels where not only is it reasonable to expect breakages, but it is also mad to expect that the debt can be repaid. If people keep going the way they are, can you even imagine a realistic scenario where it ends well? People are relying on a McConnell-Schumer-Trump-Biden-No Speaker-in-the-House controlled system to take a situation where everyone is acting unreasonably and suddenly start behaving with fiscal prudence. That is unlikely. It is more likely that catastrophic consequences will happen first, then courses will be changed.
I don't think there are even questions of rhetoric at this point, it looks to me like all the decisions have been locked in. I mean, they may as well bump up the budget for science at this point, why not. Great thing to spend money on. But where are the resources supposed to come from? The system is already in crisis and gridlock.
I would say go ahead and kick the hornets nest. The people who are here to spend other people's money must justify their existence, not the other way around.
Without getting too inflammatory, if they were as knowledge seeking as they claim to be, they would not be fervent and unwavering about their ideas. Most of them are toothless insults anyway.
Neither of the two available political parties routinely make both tax hikes and budget cuts staples of their platform. So explain again how the general populace is somehow responsible?
Probably because "debt to GDP ratio" is a made-up measure and it's totally unclear that it actually indicates something. Only two things seem obvious to me:
(1) There is no hard limit to how much dollars the government can issue.
(2) Of course, the government cannot just issue more dollars indefinitely, before Bad Things(TM) start to happen.
However, this (rather trivial) observation tells us nothing about "What is the limit (or rather, range) of how much dollars the US government can issue, before bad things start to happen?" Without explaining how you can estimate such a limit, (US debt / GDP) is just some number: There's no reason to believe that there is some hard, fixed limit X that this number is not meant to exceed.
Comments
By traditional indicators the US is broke. Debt to GDP is at historic crisis levels, debt service is eclipsing the military budget (though I didn't check if that includes the spending for the war in Ukraine) and it is unclear where the oomph to pay for retirees will come from. The main thing optimists seems to be pinning their hope on is that the authorities can print money and it will all turn out OK.
What is the conversation around science funding meant to look like? Spending money on productive investments is a great idea, but the practice of the US government is nowhere near that.
This year's Nobel prize for chemistry went to three Americans (edit: I was mistaken, one of them was living in the USSR when his initial discovery was made, though he now lives in the US). Both the winners of the Nobel prize in medicine were American. and one of the three winners of the Nobel prize in physics was American. By what metric are we "nowhere near" productive in how we fund research?
Spending as a % of budget. I feel that was obvious given the article.
I suspect you're reading something that I didn't write though - I'm just pointing the US government doesn't have spare money lying around to increase their funding of science projects. It isn't a case of "oh we'll just budget a bit more for science". There are enormous cuts/tax increases needed before that conversation can even begin.
Debt to GDP has no meaning as one is a balance and the other is a balance over a time. A better indicator will be Debt to GDP until the year infinity. Same goes for military budget, it’s for a year.
Debt-to-GDP has been (essentially) monotonically increasing since the year 2000. You’re not going to like the value each year until infinity.
What measure do you want to use? Given that debt has been consistently trending up faster than GDP for a while ... I dunno, couple of decades? ... Debt:GDP until year infinity is also quite concerning (we could reasonably project a ratio of infinity unless policy changes - ie, the US is at crisis levels).
I wouldn’t compare my $400k debt with my monthly income. I’d compare my monthly income vs my mortgage payment and my investment incomes. Same goes for the government, divide debt by number of years needed to pay it off including interest subtract the earnings from economic activity and interest earning from giving out loan to other entities and the see if GDP is able to counter that
I'm not sure what you're wanting to angle for here, that doesn't seem like a specific formula. If you're trying to calculate a single metric it seems to be number of years to pay off the debt? At current trend, that is infinity years. I'm not seeing how it could get worse than that, although no plans to pay back the debt is just business as usual by now. And I suspect the information in your sentence is actually contained in a Debt/GDP ratio (eg, is interest + GDP growth going up faster than debt implies Debt/GDP ratio dropping).
Pretty sure that is actually a fair way to assess your creditworthiness. I can see the conversation in the bank going "Yo I want $400k", "What is your income?", "$X", "Yea"/"Nay" with some basic due diligence.
The amount of debt doesn't matter, only the cost to service the debt. They're certainly related though.
I don’t know why you’re being downvoted. It’s so clear this isn’t sustainable.
Japan can't sustain a bunch of things that the US can and has a substantially lower GDP per capita. They aren't a counterexample to US debt being a problem - calibrating to follow Japan's example will involve the US dialing back its spending.
OK. Let's take the U.S. out of the equation and look at Japan's inflation - https://tradingeconomics.com/japan/inflation-cpi. Hmmm... you'd expect with the 'unsustainable' government spending in Japan that there would be an uptick in inflation. There's nothing of the sort - unless my eyes are lying to me. And this goes back to my second point - nobody really knows what levels of government spending are sustainable, and my guess, given that it's not just Japan with a high debt/GDP ratio, that it's likely a much larger number than some posters here would like to admit.
US debt repayments are similar to their military budget, and their military budget is designed to hold down China (rival superpower) and Russia (possesses a global threat nuclear arsenal, with whom they are actively at war with) and a few other countries.
I'll happily agree that the limit is unknown and it might be higher than anyone expects - but at the current trajectory we're all going to find where it is as the US hits it face-to-wall-at-speed style. Years ago we crossed the limit where that debt was never going to be repaid in real terms. Now we're getting to levels where even the interest probably isn't going to be paid back in real terms.
And, in amongst this, it isn't really clear what the debate around science funding is supposed to look like. The US appears to be going broke. It'll probably struggle to find the money for big spending on science over the next few years. Even if they execute some sort of default they're still going to have to do a round of belt tightening.
Also - on Japan - topical news: https://marginalrevolution.com/marginalrevolution/2023/10/ja...
I'm actually not as opposed to belt tightening as you might think. I just get aggravated seeing narratives without a whiff of empirical evidence to support them. (I've informally studied economics and probably know enough to be dangerous.) My personal indicators that we may be on shaky fiscal ground are the rise of monopsonies/monopolies in vertical markets that depend on discretionary income (concert tickets anyone?) and the most troubling chart I've ever seen from the BLS (Bureau of Labor Statistics) https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.ht... (scroll to the bottom and look at the last chart).
At risk of belabouring the point [0]; but the empirical evidence is that debt/gdp is an a clear uptrend. Initially when the debt was taken on, the justification was that economic growth would be fast enough that it'd not need to be paid back. That didn't happen. Then the narrative shifted to the point where ok well the debt isn't going to get paid back as such but that doesn't matter because the government can just pay the interest and roll the debt over. Now that isn't working. The justification is shifting to "well ok the US can't pay the principle or the interest but that is OK because it is a government but it can print money and force people to go along with the spending, maybe declare that lenders don't get paid back but don't call it a default?".
Waiting for more empirical evidence that this will break everything is not a great strategy. By the time the evidence is in, everything will be broken and the US will be deeply in debt. The US is already acting like an economic system under significant stress (prosperous people don't elect Trumps). When the dust settles it'll probably turn out that there were huge costs to the debt and they just didn't turn up as inflation (for example, if people literally can't afford something, then price inflation won't matter).
Japan having high debt and the US having high debt is no evidence at all that the US will end up like Japan. They've got completely different laws and people. Plus the median Japanese income is something like 80-60% of the median US income [1] so that is hardly an economic outcome to aim for.
[0] Started out with "Noy wanting to" but I figured that couldn't be true.
[1] https://worldpopulationreview.com/country-rankings/median-in...
I've always assumed it is that the trends are damn scary and people don't want to think about them. Most people struggle with financial concepts like (earning >= spending -> good outcomes) and I assume at the root it is some combination of emotional responses that just don't want to tackle the uncertainty of the future.
If you look far enough out, the future is scary. If nothing else eventually we get hit by a meteor. So people generally don't look forward more than a week or few - because it is unpleasant and seems a little pointless. They live with whatever seems like a good idea right now. I just wish they'd let people who are a bit more math-oriented take on budgeting decisions. We're going to be eating consequences that we didn't have to because the US public can't sit down and agree that solvency is more important than whatever distraction came up this electoral cycle.
Home economics and nation-state level economics are entirely, qualitatively different, not just different scales of the same thing, and people who think they're clever by comparing the two are insufferable. Global superpower economies are even more so.
A government collecting more tax revenue than they spend is a sign things are going terribly wrong. Best case scenario it means they were temporarily, inadvertently overtaxing everyone. The government "printing money", and thus creating some level of inflation, is a good thing. Deflationary economies are failing economies.
By far the biggest difference is that to you, money and debt are real. If you don't have enough money, you can't pay for the things you need. If you have too much debt and can't pay, people will show up and commit violence against you. At the sovereign nation-state level ("sovereign" excludes countries that gave up control over their money supply to disastrous effect, like Greece), money and debt are far less concrete. Debt represents "buy-in" on your monetary system: If people and nations are owed money from a country, they have a vested interest in that nation's continued economic prosperity. Money is an infinite resource to a sovereign nation: it can simply print more. Via taxation, they effectively destroy money, since Infinity + 1 still equals Infinity. Thus, money from a nation-state's perspective isn't about balancing the books, it's about controlling the flow.
In point of fact the US public has literally no control over budgetary policy so perhaps pointing the finger at the culprits instead of the useful idiots that put them there would be worthwhile.
It be not so! The US public has been surreptitiously cheering the madness on. I'm sure they'd agree with fiscal conservatism in principle - but ask them to support tax hikes? No way to win an election. Ask them to support budget cuts? Literally nothing on the table.
I've been arguing the fiscal responsibility side on HN for a long time. There is nearly no government program where a strident call for fiscal conservatism won't get a comment downvoted. It is a needle-threading exercise to make any points in favour of not spending money; it takes a lot of care, practice and timing to argue without kicking one of several hornet nests. And that in on HN where the crowds are more reasonable and logically minded.
The useful idiots are the culprits. Being an idiot doesn't absolve someone of responsibility.
Let's set the rhetoric aside. What debt to gdp ratio would be reasonable? Do you have any sources to support said ratio?
If you don't have sources, the sensible target is 0. Projects should be funded on an as-makes-sense basis and paid back. Or if you have some reason to pick a different target then sure, do that.
The issue at the moment is that the ratio is trending upwards until something breaks. And debts are hitting levels where not only is it reasonable to expect breakages, but it is also mad to expect that the debt can be repaid. If people keep going the way they are, can you even imagine a realistic scenario where it ends well? People are relying on a McConnell-Schumer-Trump-Biden-No Speaker-in-the-House controlled system to take a situation where everyone is acting unreasonably and suddenly start behaving with fiscal prudence. That is unlikely. It is more likely that catastrophic consequences will happen first, then courses will be changed.
I don't think there are even questions of rhetoric at this point, it looks to me like all the decisions have been locked in. I mean, they may as well bump up the budget for science at this point, why not. Great thing to spend money on. But where are the resources supposed to come from? The system is already in crisis and gridlock.
I would say go ahead and kick the hornets nest. The people who are here to spend other people's money must justify their existence, not the other way around.
Without getting too inflammatory, if they were as knowledge seeking as they claim to be, they would not be fervent and unwavering about their ideas. Most of them are toothless insults anyway.
Neither of the two available political parties routinely make both tax hikes and budget cuts staples of their platform. So explain again how the general populace is somehow responsible?
Probably because "debt to GDP ratio" is a made-up measure and it's totally unclear that it actually indicates something. Only two things seem obvious to me:
(1) There is no hard limit to how much dollars the government can issue.
(2) Of course, the government cannot just issue more dollars indefinitely, before Bad Things(TM) start to happen.
However, this (rather trivial) observation tells us nothing about "What is the limit (or rather, range) of how much dollars the US government can issue, before bad things start to happen?" Without explaining how you can estimate such a limit, (US debt / GDP) is just some number: There's no reason to believe that there is some hard, fixed limit X that this number is not meant to exceed.