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Re: American politics paradox

lol, no, I am not serious. It was more of a symbolic use, like a methaphor.

You can't just use "Let's refinance" idea that simply. More importantly, it might imply that it works in 99% of the time. Not 100%. The remaining 1% is for the plan B - that is what you resort to when the "house for sale" does not go away (or a big foreign debt* -> or something that you'd just don't expect to be necessery) would not be possible to be refinanced.

Let's make a distinction here - that of plan B - and notice the *beyond reasonable expectations* thing going on. It is beyond reasonable expectations that something will be completely out of the ordinary, within give or take 5-10 years. Thus, getting debt sounds like a good idea to increase the growth. But this expectation is just an expectation - the assumptions might not turn out to be that great - so there emerges the need for 'plan B.'

Thus, I am not saying with my metaphor that  the two are the same. But I refer to the business practice of having two different plans - one if the bussiness goes smoothly and one if it does not. Because in is easy to get far when nothing stops you, but if there is a mountain on the way, only the skilled climbers will go over (or some tunnel-blasting machine?)

I am scratching my fingers to give another example - something I have frequently done wrong in my personal life. Depending on e-mail. I'll send something to my own e-mail to save it. But if the e-mail gets deleted, internet is not working, I can't access what I saved! Thus, I would became dependant on my expactation that I can get to my e-mail - which works 99% of the time. And for the remaining 1% - huh, I am no rocket scientist, there is not that much that depends on me smile but using assumptions that everything will work fine allow for the 'what-if' scenarios to emerge.

I am all-in on electrics.

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Re: American politics paradox

@Noir

1: Refinancing is what's done every day with US debt.  We pay our old securities by buying new securities.  We don't just borrow money from one nation and say "pay ya back whenever I damn well please!  Cya!"
2: If you're a US bank and you see that the US economy is about to hit the shitter, you're going to do everything in your power to keep it afloat, since your assets are dependent on the value of the dollar, and overall economic growth.  This is empirically proven in the Great Depression, when banks attempted to stop the stock market crash by massively buying stock to keep prices afloat.  They failed only because the tactic was piss poor, but it does prove that banks are willing to step in and keep the economy going since it's in their individual interests to do so.
3: "At the end of the day."  That again.  Noir, I've given two posts so far that say the same thing.  This day isn't ending!  The sun isn't setting!  The work day isn't over!  7-11 is still open!  The clock stopped at 4:20 PM!
The only way we'll have to pay off the debt without the ability to take on new debt is if an external catastrophe, separate altogether from the national debt, forced the repayment.  At that point, the economy would be in the shithole anyway, so the debt wouldn't matter!

@Smiof

Alright.  I'm calling a challenge:

Give me a theoretical situation in which the following would occur:
1: Investors would stop purchasing US treasuries.
2: The US would be unable to reduce spending or increase taxes (Actually, nevermind.  I'll spot you this one, because it's pretty easy to obtain)
3: Banks won't bail out the US.
4: There is no other major economic crises plaguing the nation at the time that would overshadow the debt in terms of impact on society.

Make Eyes Great Again!

The Great Eye is watching you... when there's nothing good on TV...

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Re: American politics paradox

Huh. A nuclear war in the Middle East? Or another major military incursion. It would some major political or economical setback that would trigger all of the above points. It does not have to be a exceptionally big, but it would cripple the economy so that part 1 would not be available anymore, part 2 might actually work...anyways, some banks might bail the US but at a far greater price than imaginable.

I think that the 'resort resource' - the plan B - would be your point 2. But that would hurt. Everyone wants that bit of money. That would hurt a lot.

Look, I really do not want to guess anything, since it does not seem plausible at all.

I am all-in on electrics.

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54 Reply by The Great Eye (edited by Vampire Ninja Penguin 23-Sep-2008 15:16:23)

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Re: American politics paradox

Ha!  There you go!  The moment you cross into "cripple the economy," the economy is already crippled, so the debt doesn't make a damn bit of difference.


It's like if you're on the Titanic and you say "Oh, I just spilt a glass of water on my shirt!  Now I'm going to be all wet!"

Make Eyes Great Again!

The Great Eye is watching you... when there's nothing good on TV...

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55 Reply by Smiof (edited by Smiof 23-Sep-2008 09:27:40)

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Re: American politics paradox

I did not read your response to Noir, and I do think that is correct. The debt is only - correct me if I'm wrong - not that big percentage of the GDP.  Not too much compared to some other states.

But it is money to pay at some point, as opposed to be paid. It is like being in Titanic and getting into a boat with an extra dog - the dog needs space that another human could take.

Or take your Great Depression example - the banks tried to save it but they did not manage it properly. Do you want to rely on them? We all have to but what if they miscalculate something?

I am all-in on electrics.

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Re: American politics paradox

Smiof, back to my... like... second post in this thread.  And just about every post since then.

This "eventually" just doesn't exist!

Make Eyes Great Again!

The Great Eye is watching you... when there's nothing good on TV...

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Re: American politics paradox

Our federal debt is just about equal to the GDP.

The core joke of Hitchhiker's Guide to the Galaxy is that of course no civilization would develop personal computers with instant remote database recovery, and then waste this technology to find good drinks.
Steve Jobs has ruined this joke.

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