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Comment by kushti | Hacker News Reader

What is the true state of US economy? Could it be viable without the government debt growing at a crazy fast pace?

Debt is actually growing at a moderate rate, as it tends to do in most growing economies. The United States took on enormous amounts of debt leading up to and following World War II, but the postwar economic boom and ensuing inflation (which is fine in a healthy and growing economy) reduced the unprecedented debt "crisis" to barely a footnote in American financial history.

I pretty in doubt the American economy will be booming in an observable future. And debt is growing faster than GDP: http://www.wolframalpha.com/input/?i=us+government+debt+vs+u... , so I'm still in question how economy will survive without debt money supply.

I wonder what GDP in China will look like in 3 years when they have a huge baby boom.

Huge baby boom? From where? Just because they've relaxed the one child policy doesn't mean everyone is in a rush to have kids. A more common phenomenon is men saving every penny to someday afford a house, because the few single women refuse to date a man with anything less.

Every single economy that transitions from agriculture to industry experiences the same fall in birth rates. Having a lot of kids goes from being an insurance against elderly poverty to an insurmountable burden on your focus and finance. Most of the Chinese couples who have one child are happy to leave it from that.

How will China experience a baby boom any time soon? Why 3 years? Where's your evidence?

I have no evidence I can't see into the future and no one else in this thread can. It's pure speculation, all I know for sure is the official birthrate will go up and I'd bet any amount of money on that. I picked 3 years because if you didn't know it takes 9 months to have a baby so that'd be a good time frame to see the rate up. Any other questions?

Yes, why will the birth rate go up if the cost of raising children remains high and China's economy appears to be slowing down? These are macroeconomic signs of lower birth rates, not higher.

Birthrate will go up, get over it.

Inflation is good for debt holders, because they can pay off their debts with devalued money. Inflation is bad for those that save and invest because they have to earn a higher rate of return to offset inflation. Traditional economics tells the right story that inflation is not a good thing. Political economics (which is why economics is nowadays) tells you what fits the situation, so don’t work about it, eh?

Look at deflation pre-WW1 and not that not only was this a period of growth, but also one where downturns were sometimes severe but over very quickly. You have the Panics of 18xx, but not any panics that last years.

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