Comment by hn_throwaway_99 | Hacker News Reader

Comment by hn_throwaway_99 | Hacker News Reader

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hn_throwaway_99

This is my personal theory: modern technology and media has made it more possible to surround yourself with only like-minded views that share your "fairy tale thinking", even if the eventual outcomes are obvious from the outset.

Was really glad that this article mentioned Liz Truss at the end, because I think the dynamics are absolutely the same. It was painfully obvious (indeed, the current PM made it clear in the summer) that cutting taxes, and having no way to pay for them, in the midst of rampant inflation is an idiotic idea. I read elsewhere that it's almost as if Truss and Kwarteng formed a pact in college saying, "if we ever make it to the top of government, we'll prove that supply side ideology works!", and then completely disregarded the current economic climate.

I just see it more and more over the past decade or so that things that you know are not going to end well (see also crypto deposits paying 10% interest) somehow snowball because it's easier to surround yourself with "ideological cultism".

The irony is that the damage is almost exclusively done by Conservative governments who are traditionally view as more fiscally responsible and more competent at economics, while the left side of politics are often viewed as more ideologically driven.

A similar reversal of roles can be seen in Germany, where the greens economics minister surprised the business community with effective solution oriented "realpolitik" and the free Liberal (a pro business/free market party) finance minister is blocking decisions for purely ideological reasons often against the recommendations of large portions of the business community.

Rick Perlstein goes into some depth on this in direct response to Liz Truss. And yet, after her brief reign, I wonder if he misunderstands why he's her favorite author. Perhaps she didn't misunderstand any of it, she merely said the quiet part loud.

https://www.spectator.co.uk/article/liz-truss-hasn-t-underst...

Good read, TY.

More likely that 'modern tech' is just exposing corruption that has always been there.

This is just statist feudalism exposed.

Modern technology is also amplifying populism, which is who the word 'Truss' ends up in all of this, because however much one may agree or disagree with the contents or orientation of the mini-budget, it was woefully misrepresented in the press (almost universally) in an excessively populist manner.

>> that cutting taxes, and having no way to pay for them, in the midst of rampant inflation is an idiotic idea.

Let's see what happens here in the U.S. :-/

I believe Kansas tried in in 2012

That seemed like a race to 0.

The most recent US federal legislation (the Inflation Reduction Act) actually raises government revenue significantly. While the Inflation Reduction Act probably won't do much short term with respect to inflation, it should reduce the deficit over the long term.

I can definitely understand arguments and debates around the proper level of taxation. But while it may be acceptable and even a good idea to substantially lower taxes and raise the deficit during periods of low inflation, it is the height of idiocy to do that during a period of high inflation.

Debt reduction of ~$6B/year is rather minimal given trillion dollar annual deficits.

“CBO estimates that Public Law 117-169 will result in a net decrease in the unified deficit totaling $58.1 billion over the 2022-2031 period. That decrease in the deficit is estimated to result from an increase in direct spending of $50.6 billion and an increase in revenues of $108.7 billion.”

https://www.cbo.gov/publication/58455

But increasing spending through increased debt is also idiotic.

Depends what you spend the money on. If it's infrastructure then it's likely a wise investment.

This is an example of fairy tail thinking though because so many people say this. Government spending money that didn’t directly come from taxes during inflation is just going to pour fuel on the inflation fire, regardless of how useful the investment.

Money needs to be taken out of circulation, not added.

Inflation decreases the cost of historical debt balances too...

... and who has a large balance of historical debt?

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