Ferguson: "Are We the Soviets now?"

[Tidewater]

Niall Ferguson wrote an article in June with the title: We’re All Soviets Now
A ~20 minute video version is here.

A pretty depressing look at things. "the federal government will almost certainly spend more on debt service than on defense this year. ... According to the CBO, the share of gross domestic product going on interest payments on the federal debt will be double what we spend on national security by 2041, thanks partly to the fact that the rising cost of the debt will squeeze defense spending down from 3 percent of GDP this year to a projected 2.3 percent in 30 years’ time."
Ferguson observes that "great powers that spend more servicing public debt than defense are not great for long."
I was not too invested when in the presidential contest because I was pretty sure that "winning" the White House would be winning a booby prize. Either "winner" was going to be handed a crap sandwich to eat. We need to cut spending and/or raise taxes about $2 trillion/year and neither is going to be popular. And if we fail to do that, these united states will go sailing off the cliff like Thelma and Louise.

 

[Bodhisattva]

Five years ago, the federal budget was $4.4 trillion.

Now it is almost $6.8 trillion.

More debt. More unintended consequences (damage). More crowding out of the productive private sector. More government employees soaking up taxpayer money in the form of salaries and benefits instead of doing something much more beneficial in the private sector.

 

[Tidewater]

Five years ago, the federal budget was $4.4 trillion.

Now it is almost $6.8 trillion.

More debt. More unintended consequences (damage). More crowding out of the productive private sector. More employees soaking up taxpayer money in the form of salaries and benefits instead of doing something much more beneficial in the private sector.

The US can get a handle on federal debt or it will get a handle on the US.

Ferguson's article and lecture was not just about federal debt. Declining institutions, "excess deaths/deaths of despair." The US have a bunch of problems.

 

[Padreruf]

The US can get a handle on federal debt or it will get a handle on the US.

Ferguson's article and lecture was not just about federal debt. Declining institutions, "excess deaths/deaths of despair." The US have a bunch of problems.

We are a declining, aging power that is moving past its prime. In another 30 years we will be in deep financial trouble. The only factor that may save us is that Russia and China are far worse off. At least we have immigration to provide us a working class. They do not...and their birth rate is far worse than ours.

 

[Tidewater]

We are a declining, aging power that is moving past its prime. In another 30 years we will be in deep financial trouble. The only factor that may save us is that Russia and China are far worse off. At least we have immigration to provide us a working class. They do not...and their birth rate is far worse than ours.

Yes, relatively. If I lose my left arm in a car crash, however, it is scant consolation that my neighbor had two legs and an arm amputated due to diabetes.
In geopolitics, Russia, China, and the US declining may allow others to assert themselves on the world stage (India, maybe? Brazil?), but I believe the ending of the Pax Americana will allow settlement of a lot of scores that are currently dormant because the American-led international order would crush an aggressor.
Serbia-Croatia, India-Pakistan, North and South Korea, Saudi Arabia-Iran, Turkey-Greece, Armenia-Azerbaijan. A lot of people, I'm afraid are going top get killed.

 

[Bamaro]

Niall Ferguson wrote an article in June with the title: We’re All Soviets Now
A ~20 minute video version is here.

A pretty depressing look at things. "the federal government will almost certainly spend more on debt service than on defense this year. ... According to the CBO, the share of gross domestic product going on interest payments on the federal debt will be double what we spend on national security by 2041, thanks partly to the fact that the rising cost of the debt will squeeze defense spending down from 3 percent of GDP this year to a projected 2.3 percent in 30 years’ time."
Ferguson observes that "great powers that spend more servicing public debt than defense are not great for long."
I was not too invested when in the presidential contest because I was pretty sure that "winning" the White House would be winning a booby prize. Either "winner" was going to be handed a crap sandwich to eat. We need to cut spending and/or raise taxes about $2 trillion/year and neither is going to be popular. And if we fail to do that, these united states will go sailing off the cliff like Thelma and Louise.

Until we feel the pain of this, nothing will be done by either party to rectify the situation. Way too many voters are taken in by thinking they can get something for nothing.

 

[Tidewater]

Until we feel the pain of this, nothing will be done by either party to rectify the situation. Way too many voters are taken in by thinking they can get something for nothing.

Sadly true. Once the pain really starts, the amount of pain is going to be excruciating.

 

[Tidewater]

From two years ago, but even more relevant today.

Stanley Druckenmiller is an American billionaire investor, philanthropist and former hedge fund manager.

 

[crimsonaudio]

Sadly true. Once the pain really starts, the amount of pain is going to be excruciating.

And unless we start handling it on our own terms and timing, it will be forced on us and we'll have no control.

 

[mdb-tpet]

Niall Ferguson wrote an article in June with the title: We’re All Soviets Now
A ~20 minute video version is here.

A pretty depressing look at things. "the federal government will almost certainly spend more on debt service than on defense this year. ... According to the CBO, the share of gross domestic product going on interest payments on the federal debt will be double what we spend on national security by 2041,

And that's why we simply fix the problem by cutting our tax revenue by cutting taxes again, and again, and again, and...

Or we could push our one-trick-pony elected officials to do the hard/right things and raise taxes AND cut spending, but just a little while our economy is doing reasonably well (not in a recession). Trump is a lame duck president, so he could easily do this, but he won't.

 

[Tidewater]

And that's why we simply fix the problem by cutting our tax revenue by cutting taxes again, and again, and again, and...

Or we could push our one-trick-pony elected officials to do the hard/right things and raise taxes AND cut spending, but just a little while our economy is doing reasonably well (not in a recession). Trump is a lame duck president, so he could easily do this, but he won't.

Unfortunately, both candidates were promising tax cuts.
If they had been honest, they would have both been promising tax increases and spending cuts.

 

[TexasBama]

From two years ago, but even more relevant today.

Stanley Druckenmiller is an American billionaire investor, philanthropist and former hedge fund manager.

Fun trivia - Drunkenmiller helped Soros break the Sterling.

 

[Padreruf]

Yes, relatively. If I lose my left arm in a car crash, however, it is scant consolation that my neighbor had two legs and an arm amputated due to diabetes.
In geopolitics, Russia, China, and the US declining may allow others to assert themselves on the world stage (India, maybe? Brazil?), but I believe the ending of the Pax Americana will allow settlement of a lot of scores that are currently dormant because the American-led international order would crush an aggressor.
Serbia-Croatia, India-Pakistan, North and South Korea, Saudi Arabia-Iran, Turkey-Greece, Armenia-Azerbaijan. A lot of people, I'm afraid are going top get killed.

For sure...we have been the world peace keeper, but that seems to be fading. We humans are a violent lot...

 

[TIDE-HSV]

Yes, relatively. If I lose my left arm in a car crash, however, it is scant consolation that my neighbor had two legs and an arm amputated due to diabetes.
In geopolitics, Russia, China, and the US declining may allow others to assert themselves on the world stage (India, maybe? Brazil?), but I believe the ending of the Pax Americana will allow settlement of a lot of scores that are currently dormant because the American-led international order would crush an aggressor.
Serbia-Croatia, India-Pakistan, North and South Korea, Saudi Arabia-Iran, Turkey-Greece, Armenia-Azerbaijan. A lot of people, I'm afraid are going top get killed.

IMO, Russia and China, despite current apparent conditions, have much more pressing demographic problems. India has demographic problems of the opposite type. I think that, rather than there being one or two dominant powers, there will be a chaotic situation, with many competing powers. I'm reminded of a couple of old Russian apocryphal stories. One is the peasant whose neighbor becomes prosperous enough to acquire a cow. The first peasant is reminded again of his poverty and prays. The Lord listens to his complaint and asks him what he wants done. The first peasant frames his request - "Kill my neighbor's cow." In the other, a visitor to hell is being given a tour. They pass huge vat after vat, full of boiling oil and sinners trying to get out but being prevented by demon guards. They finally pass one where there are no guards and the visitor asks Satan why. He replies that those are the Russians and no guards are needed. If one is about to escape, the others drag him back in. There is a lot of truth in both and is one reason Russia was never probable to be a genuine world power...

 

[Tidewater]

IMO, Russia and China, despite current apparent conditions, have much more pressing demographic problems. India has demographic problems of the opposite type. I think that, rather than there being one or two dominant powers, there will be a chaotic situation, with many competing powers. I'm reminded of a couple of old Russian apocryphal stories. One is the peasant whose neighbor becomes prosperous enough to acquire a cow. The first peasant is reminded again of his poverty and prays. The Lord listens to his complaint and asks him what he wants done. The first peasant frames his request - "Kill my neighbor's cow." In the other, a visitor to hell is being given a tour. They pass huge vat after vat, full of boiling oil and sinners trying to get out but being prevented by demon guards. They finally pass one where there are no guards and the visitor asks Satan why. He replies that those are the Russians and no guards are needed. If one is about to escape, the others drag him back in. There is a lot of truth in both and is one reason Russia was never probable to be a genuine world power...

I think you are correct on that. The Pax Americana, while far from perfect, has been beneficial to billions of people. Once it is over, billions will suffer