Comment by cduzz | Hacker News Reader

Comment by cduzz | Hacker News Reader

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Money is only trusted if everyone agrees that "a number in a ledger" is money.

Ultimately, wealth, beyond what you physically control, is only real if everyone else agrees that it's real. Otherwise you're just tapping a rock on another rock and walking out of the store with eggs.

And that 36 trillion in debt was created with a complex dance out in the open; I've got some paper who wants some paper I'll give you number go up in a year if you give me number now! And we can all look at the ledger and there are people in robes in a locked room who protect the ledger when we're not looking.

If instead we've got a ledger, left floating around the house and garage, and all the people in robes have been fired, and all of a sudden we don't need that tedious "pass laws" stuff to "balance the budget" and the ledger's full of sharpie scribblings, what are the numbers in that ledger? The fewer people who believe that number or ledger, the fewer eggs you'll be able to buy by tapping your rock on someone else's rock.

The same goes for other ledgers -- stocks -- the US stock market is trusted only because people trust the numbers that are reported. If you've fired all the regulators, auditors, and enforcers, your stock market will lose trust, and again, the numbers will be the same but worth less because nobody will believe anything.

Money has a perception of value because of scarcity + demand. The government could, in theory, 'print' enough money to make every single American a trillionaire tomorrow.

Of course all that would do is make the dollar worthless and completely destroy the US economy. I think you would obviously agree.

That also means that we must agree that 'money printing' taken to an extreme can have catastrophic effects. So where we disagree is where we are on the line between the points of inherently valuable and stable currency, and lol funny money.

When the interest on the debt is starting to exceed our total discretionary budget, let alone at a major inflection point in global economics/relations, I tend to think we're prettty far down that line.

I'm going to agree with you actually that we should reduce spending and pay down the debt because it's gotten too big especially with respect to the debt/gdp ratio.

So we can start on a solid foundation where we both agree. The thing I have trouble with is I don't think the people in government right now talking about reducing the debt by cutting waste and fraud agree with you and me.

The reason I think this is because last time they were in full control of the government they also had talked a good game about reducing the debt, but instead they cut taxes for the richest Americans and added to the debt, substantially. They told us it would pay for itself -- that didn't happen.

They also did it the time before that, during the Bush Administration. They ran up trillions in debt on a war that we didn't need to go into and we ended up losing, erasing an inherited budget surplus.

Now they are talking about ethnic cleansing Gaza, and giving themselves yet another tax break. On the other side of it, they're slashing and burning programs that they oppose on ideological grounds, which as a percentage of the budget won't even move the debt needle a smidge. And they can't show these programs were actually fraudulent or wasteful.

So my question is: why do you trust these people to cut the debt and deficit if they haven't been able to do so at any point in the past 20 years, a period during which they had majority control of the government multiple times, and they're proposing the same failed playbook?

Obviously you're right about what politician's promising being irrelevant. Things are different this time because of actions. To weigh impact you need to consider discretionary vs mandatory spending.

Mandatory is made up of things like social security, pensions, medicare, and so on. That's all automatically funded with no role played by Congress. The money that's left over after is what Congress actually decides how to spend in those thousands of pages long budget bills that nobody reads - that's discretionary spending.

In 2024 the discretionary budget was $1.7 trillion. Exclude the military (which is also discretionary) and you're down to $900 billion for all the projects people typically associate with government - transportation, education, infrastructure, and so on. USAID took up ~$50 billion of that. That's a major reduction!

This discretionary:mandatory divide is also why DOGE is going after the Pentagon next. Slashing mandatory spending is hard, though you might be able to cut e.g. administrative costs. But discretionary spending is just chock full of pork and corruption with negligible accountability.

I agree they're cutting ideological programs - I don't agree this is intrinsically ideological. They're cutting e.g. DEI and atheism propaganda, but not just replacing it with e.g. color-blind society and respect for religion propaganda. They're just dropping the propaganda funding altogether. I'd like to see this carried out everywhere, even in cases where the propaganda might align more closely with my own biases.

Money at this point has value because we all agree it has value.

You walk into a store, pick up a box of eggs, bonk your rock on another rock, the other rock makes a happy beep or turns green, and you walk out.

There's no scarcity or demand or anything going on besides "everyone with the rocks trusts the rocks"

We're all going to pretend to trust the rocks as long as we can, because the alternative is violent chaos.

There's no trust or belief - you're just trading one scarce in demand resource due another scarce in demand resource - nothing more and nothing less.

This is the reason your money becomes worth less when we print more. A vendor selling whatever will want even more because his product is just as scarce as it was before, but what you're trading for it has become less scarce, and so has less value.

And taken to extremes this value can approach 0 quite rapidly. Trust, belief and all these things don't matter if you're trying to trade me something I see as less valuable than what you want in exchange for it.

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