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Comment by mrtomservo | Hacker News Reader

I wonder if unchecked capital accumulation combined with cutting the social safety net and major public works will lead to commerce without customers: An economy built on consumption where nobody has the money to consume.

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This is what people have been speculating will happen with the rise of the K-shaped economy. An economy where a smaller and smaller number of consumers are responsible for more and more of consumption.

I think the problem is a sort of self-correcting one though because when the cuts start to bleed deep enough that people can no longer afford food or basic amenities that's when people start to get violent. Unfortunately that also tends to be very bad for economic outcomes.

That premise is kind of false though. Food stamps are very generous, much to the chagrin of the borderline tax contributors.

I think we'll just see benefits slowly ramp up until most people are on benefits, with lots of consternation around government waste along the way.

> Food stamps are very generous

Certainly not in Texas.

A single person, who makes $910/month before taxes, rent, transportation, clothes, and insurance, could spend a lot of time and energy on paperwork, and then net $24/month.

https://www.hhs.texas.gov/sites/default/files/documents/snap...

Generally increasing "money supply" will increase the spending floor, which business will eventually use to increase profits, which we read as inflation. (Sorry, I mean they'll do price discovery to optimize corporate ownership benefits.)

As long as the economic system can absorb it (and there are plenty of places with >20% inflation rate that survives,) you're right. But if it makes people feel they have "nothing to lose" on going against the rich, GPs scenario will kick in. Ray Dalio (and the Fourth Turning book) suggests this debt cycle is overstretched, and that we should _expect_ an uprising soon that resets it.

Food stamps are definitely not 'very generous', speaking from personal historical experience. And food stamps can't pay for health insurance, rent or car bills.

What state are you in that leads you to belive food stamps are very generous? For example West Virginia (not the lowest) maxs out a family of 4 at about $500 a month.

It’s all moving to a service economy for the wealthy as the only consumers.

You can see this most dramatically in Las Vegas right now: https://m.youtube.com/watch?v=LHwU4lQ46nA

This is because America builds nothing anymore. Consider Disneyland. It's expensive as hell. But also there are more people in America than ever. You'd think they'd have built another one, but they haven't. Why?

Disney world does not count?

When was Disney world built? Why can nothing be built anymore. Disney is but one example.

People complain about data centers due to electricity. We have technology to generate infinite electricity yet the answer is to not build rather than build both the utilities and the data centers. Everyone would benefit from more availability of energy

My pet theory on why a lot of things happen in the US that don't happen elsewhere is one of disposable income.

We have the biggest pile of disposable income (not per capita, but in total) of anywhere in the world. This enables people to sue when something is going on that they don't like, and once you start looking at things through this lens, lots of strange things start to make sense. For starters - a lot of the school-related controversies. Schools cave to many demands because they are afraid of being sued by monied parents, and you can see it with parents on both sides of the political spectrum.

You may also notice if you're in the US, consuming foreign content on Youtube that even non-English content has a tendency to put units in dollars, miles, pounds, etc. There's guides that talk about targeting the US lets you make the big money on Youtube.

And of course, the NIMBYism. People can slow down, raise the costs of or stop megaprojects entirely via flurries of lawsuits.

Money makes things happen or not happen. The town I went to college in was a wealthy town which had banned any kind of large structures to preserve the natural beauty of the town. But then all the wealthy residents got cell phones, and hated the cell coverage. The solution: A multi-million dollar bell tower which towered over the landscape, looking like a grand obelisk (and which tastefully concealed rather a lot of cell tower hardware).

$7.01 trillion

A deficit occurs when the federal government’s spending exceeds its revenues. The federal government has spent $1.25 trillion more than it has collected in fiscal year (FY) 2026 - another 1.25 trillion to go for the second half of the year.

There is no economy without customers/consumption. Elon Musk's SPCX are worth zero if nobody wants to send anything to space and nobody can send anything to space if nobody has any money. Debt can fuel consumption to some degree but that has limits. Capital accumulation on its own does not impact the economy. You can put the number $10000000T against Elon's name and it will not change the economy at all. What changes the economy is how this money is deployed. Economies are not zero sum games and money is not a fixed quantity. That's not to say this is meaningless but it also doesn't mean that Elon now has your dollars.

a large % of wealth is a made up number. if everyone runs to the door to sell an asset it becomes close to worthless pretty quickly.

No commerce going on when the trillion cells inside your body interact. Yet more energy is consumed by the brain.

It's unlikely because governments actively try to avoid that even if it means printing money. Also commerce needs customers or it fails.

Screw ups where that kind of thing has happened like the Irish potato famine, which was mostly a result of crap British governance are mostly avoided these days.

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