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Comment by thedragonline | Hacker News Reader

>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.

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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...

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