U.S. national debt hits $33T for the first time
cnbc.com
cnbc.com
I also strongly suspect that if a war did break out in Taiwan, other countries might start making moves knowing the US can't fight a battle on all fronts. For example, North Korea might launch an attack on South Korea, there might be more coups in Africa or Latin America in countries with critical resources etc. It would be difficult for the US to support the Ukraine war, a Taiwanese war and all these other efforts. I don't know about the US but it's well known that a lot of UK military equipment stocks are already quite seriously depleted from the Ukraine war alone. Ben Wallace was trying to get this addressed pretty urgently when he was the UK defence secretary, but the UK has so many systemic problems that need financing at the minute it's unlikely that much is going to get done about it unless something like a World War breaks out.
China needs hypersonic because US AEGIS Cruisers are the best anti-air defense in the world, so China needs the best missile in the world to threaten them (As well as the Supercarriers that they protect).
It makes no sense for USA to build hypersonic, because none of our foes are building a missile shield comparable to AEGIS. Its the whole "Unbreakable shield / irresistible spear" paradox. If no one else has an unbreakable shield, there's no point making an irresistible spear.
If I remember right, one US General did come out and seem to be pretty worried about these hypersonic missiles and how far behind the US was in comparison. The Titanic was the 'unsinkable ship'. If the unbreakable shield breaks, you're going to want your spears to be the same strength as your opponents.
Why?
A substantial portion of energy in a Hypersonic missile is spent battling drag. Its far more efficient to kill them with sub-sonic missiles or supersonic missiles so that there's less drag. The less drag you have, the bigger the payload you can put.
Think of it this way: 100% of the weight of your missile needs to be allocated between thrust and explosives.
If you go 80% thrust, you'll reach hypersonic, but now you barely have any explosives left over. And the vast majority of this "thrust" is wasted on air-drag.
If you go 20% thrust, you'll have 80% explosives left over for your weight. You'll take longer to get there, but supersonic (and subsonic) has significant efficiency gains.
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There is a USA hypersonic missile project that does away with this problem by being 100% thrust and attacking with kinetic energy alone. But you can see... this fundamental physics question of allocating "explosive" vs "thrust" is very fundamental to the situation at hand.
I posit that any hypersonic missile will do less damage than an equivalent subsonic cruise missile of the same weight class. Because air-drag at hypersonic speeds really is a major play on the amount of energy you deliver to the opponent.
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You go "faster' not because it does more damage. You go 'faster' because it avoids the enemy defenses. But that speed costs you rocket fuel (rocket fuel that could have been high explosives instead).
The general assumption is that no one uses nukes. Because if we go nuclear, the world as we know it is over.
There is no missile shield vs Ballistic missiles or ICBMs. That's always been true. Our defense against ICBMs is always the same, we have more of them and promise to blow the enemy up with our more numerous, bigger nukes.
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The reason hypersonic missiles are a 'thing' is because they aren't nukes. They work because China (presumably) figured out a homing device that can lock onto ships.
So from a conventional perspective, it's about hitting a fleet of ships without escalating to nuclear combat.
That doesn't mean that China instantly wins vs Taiwan, it just means we need to be careful about our fleet positioning and stay outside of China's sensor / homing mechanisms range. Our F35 can perform mid-air refueling for a reason, we can sit outside the range of the Chinese missile and still fly missions, albeit with a slower response time due to the increased flight distance before combat.
The question it comes down to is how many fronts can they effectively fight on? If the US is fighting in the Ukraine trenches, the Taiwan strait and the Korean border, how much do they have left over for the other places? Even stuff we take for granted such as shipping goods around the world easily because of the general lack of piracy goes out of the window because you need the warships that were policing the shipping routes for the war effort.
The US winning just cements the dollar dominance in the world.
This has fairly similar parallels to what happened in WW2 though. US entered the war mid way through after Pearl Harbour and helped win the war, theoretically India could do the same.
> The US winning just cements the dollar dominance in the world.
Again, in WW2 the UK was the dominant currency, was on the winning team, but lost dominant currency status because the debts amassed were too large that it no longer had enough money to maintain the infrastructure necessary and service the debt so other countries sold off their holdings of GBP debt in favour of the safer haven of the US.
It's difficult, if not impossible, to maintain that kind of global influence and service stratospherically high debts simultaneously. In that scenario, spending money to resolve internal problems always ends up taking precedent over global influence and other countries with rising bank balances step in to fill the void.
Whatever it takes? As long as American interests are threatened. I don't mean jumping into every single quagmire of questionable value to the USA (Afghanistan, Iraq, Vietnam), but if Taiwan, Japan, South Korea, Ukraine were threatened with being taken over by..actually anyone at all...I don't see how the USA couldn't get involved, and why it wouldn't be in their interests not to.
The alternative is a rapid decline in world stability, which would cost way more than whatever America spent fighting instead.
> If all this happened, my money would be on India leapfrogging to first place because it would be able to stay out of the main conflicts whilst simultaneously being able to leverage it's massive population and engineering skills to become the biggest manufacturing force.
If India were able to function and produce at America's level, they would already be leapfrogging everyone, but they are still pretty dysfunctional in terms of governance and allocating capital and labor productively. The only part of India doing well is a small private sector in technology that benefits from the government not caring about it enough to meddle.
China, on the other hand, has a much better chance of capitalizing on American instability one way or the other IF they are somehow not involved in the conflict.
Yes but this is what the UK did in WW2 and ended up with so much debt that it could no longer service them and other countries lost faith in buying the debt and so they invested in the US instead.
> If India were able to function and produce at America's level, they would already be leapfrogging everyone, but they are still pretty dysfunctional in terms of governance and allocating capital and labor productively. The only part of India doing well is a small private sector in technology that benefits from the government not caring about it enough to meddle.
They're growing rapidly and they're one of only four countries to put a vehicle on the Moon. If the world was at war there would be a lot of money to be made and they're one of the only countries that would be well positioned to take advantage of it.
> China, on the other hand, has a much better chance of capitalizing on American instability one way or the other IF they are somehow not involved in the conflict.
Well yeah, but we're specifically discussing a theoretical conflict in which they're one of the main players in the conflict.
India is probably about where China was I would say 25 years ago (having visited China in 1999 and comparing it against what I saw in India in 2013 or so). There is a lot of documentation about visiting the moon, and while an accomplishment, and probably something that should be done along the way to development (especially if you want to launch like ICBMs, which was the main product of America's moon program), its a bonus. But it isn't as great as figuring out how to do it from zero. Keep in mind that even China lags on jet turbine and semiconductor production (they can get either good perf or good costs, but not both at the same time), that just means India has another 30-40 years before it catches up with the US (assuming the US stagnates, which is probably a good bet).
No, its not, and arguably it never was. The two major regional contingency concept was adopted shortly after the first Gulf War and was an organizing principal in theory for a couple decades, did not actually provide the capacity to succeed in two major regional contingencies simultaneously [0] the only time tested, and has been effectively abandoned.
[0] there's no particular resourcing need for any number of contingencies of a particular scale if you don’t demand capacity to win.
At the end combine combat arms win the day and there is zero indication that China has sorted that. Heck, I would offer that with their top down structure they never will. Let us not forget in the US military a PFC is taught how to and can call for fire support. You have to be an officer to do that if you are russia or China.
The largest air force in the world is the US Air Force. The 2nd largest, the US Navy and the 3rd, the US Army.
In Ukraine the combine arms concept even without an Air Force that owns the sky is tearing apart what was the 2nd largest military in the world. In a full out war with China the US would own the sky battle space pretty quickly.
I am not saying that China will not sort this at some point, but right now they are looking at Ukraine and going "hum".
Taiwan is a fortress and as long as the people of Taiwan are willing to fight it will be a near impossible nut for China to crack.
Another note is how dependent China is on oil imports. The US could quickly blockade all imports pretty quickly far from the range of land based Chinese missiles. They would be out of oil in 2 weeks. That part of the world has a very defined set of choke points.
Most people aren't aware that Japan started the war in the Pacific with 3 or 4 times as many aircraft carriers as the US had. The deciding factor was that the US could replace the carriers that were sunk in 1942 whereas the Japanese didn't have the manufacturing capacity to do likewise. The US was able to build about 150 (smaller) aircraft carriers in four years, the Japanese had no hope of doing that.
In today's world, the powerful US of 1942 no longer exists. The country which has the manufacturing capacity today is China.
The US thinking of going to war against China is as smart as the Wehrmacht thinking of going to war against the Soviets. And we all know how that one ended up.
Like say that Ukraine prevails with current levels of US involvement (so essentially no impact on the debt). What does that imply for "the US"?
Perhaps some entitles stop transacting with "the US"? Which ones?
https://youtu.be/xguam0TKMw8?si=j1n3nJqbsX2YJHLj&t=1921
The general gist is that the dominant country is in so much debt, and the scale of the devaluation through money printing to get rid of the debt is so great, that it can no longer afford to maintain the global infrastructure necessary to keep its dominant super power status and simultaneously service it's debts so the countries who are buying the debt (which is what grant it it's reserve currency status) look for a safer country to invest in and that becomes the new reserve currency.
If it's just the Ukraine war, the US is probably fine and can get it's debts down if it makes the necessary moves to resolve internal problems. If the war extends to more fronts, then it could feasibly end up exactly like the UK where it wins the war but loses the status as dominant currency.
"The financial position of the United States includes assets of at least $269.6 trillion (1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP)."
Am I confusing government debt vs. private sector debt here?
I might be wrong about this, but most of (all?) the aid given to Ukraine by the US has been in the form of loans. If Ukraine loses, the US may have to write-off a lot of loans that it holds as assets. Similarly, if the US has to sell some of these assets, it'll have to find buyers and the assets during sale may not fetch their paper value.
Until we find out, the party goes on!
If the U.S. were a private business, standard accounting would count all the federally-owned land (from national parks to post offices), buildings, machinery, vehicles/boats/airplanes, and intangibles such as national databases and various intellectual properties. The valuation of many of these assets starts with what they cost to acquire or create, in some cases decreased by depreciation (but not land).
After all, in the past countries such as France and Russia sold huge tracts of land to the U.S. Why someday couldn't the U.S. sell some land, to convert an illiquid asset into a liquid one if necessary?
"The federal government owns about 640 million acres (2.6 million km2) of land in the United States, about 28% of the total land"[0]
[1] https://www.bloomberg.com/news/articles/2023-09-19/world-deb...
[2] https://www.ft.com/content/d650865b-8ba1-4881-a1ed-d6e025459...
I'm pretty sure when we hit $32T it was for the first time, and $31T, etc.
I remember when I was a kid, the Reagan administration debt was a massive deal, leading to the famous debt clock and was at a measly $1T.
We should really be cutting the corrupted government agencies, and curb military spending; but the politicians will probably try to cut social security, medicaid and medicare, and/or just inflate us to death.
Military spending is ~12% of the budget?
Social Security, Healthcare, Medicare and other social programs account for ~80%, so slashing our military spending by 50% would barely slow debt growth.
Military spending is also easier to regulate, it is a fixed price the government can tune up and down at their discretion. Social Security and other social services are not at their discretion and it is difficult to slow the amount of money they consume.
Wrong.
Social security and medicare are funded by taxpayers. Social security 6.2%, medicare 1.45%. Total 7.65%. Employer has to match that. Total of 15.3% of everyone's paycheck goes towards funding this. Even for retirement contributions, they are after FICA taxes are taken out.
https://www.pgpf.org/blog/2023/02/should-we-eliminate-the-so...
People who aren't employed, also don't pay medicare tax. This includes wealthy people who make their money by other means like market speculation, etc.
https://www.patriotsoftware.com/blog/payroll/a-closer-look-a...
The middle class is solely supporting both of those programs.
Following the bipartisan Social Security financing deal in 1983, Social Security ran a surplus every year until 2021. Starting in 2021, Social Security’s total cost exceeded its total income.
https://www.cbpp.org/research/social-security/understanding-...
https://www.ssa.gov/policy/trust-funds-summary.html
Around 2% this year, a bit more last year.
Is there a list somewhere we can view? Is it always true that "corruption" = "spending too much money", or in other words, what would the dollar savings be from eliminating the corruption?
More discussion here: https://news.ycombinator.com/item?id=37563335
I'm not economist, so can someone tell me what does such high debt mean in short/long term perspective?
Not an economist either, but in the UK this means ever increasing taxes and lower quality services and infrastructure. And it's not going to change anytime soon.
I'm fine with spending cuts. But let's start with the oversized military, the fossil fuel subsidies, the industrial tax bribes.
Instead of, you know, cutting food stamps and social services.