pingburg

Joined 12 years ago

Karma

Submissions

Member since

Apr 15

View on Hacker News

Recent submissions

Comment · 12 years ago

A video link to the actual launch failure https://www.youtube.com/watch?v=yfMbGPf4r9g

Comment · 12 years ago

It's an interesting question. I would argue that it isn't about the U.S. government's stability, but more about the confidence that you can use a dollar to buy x. And I don't think its a binary decision like the dollar will ultimately not be able to purchase x. Instead it will be how many dollars it takes to buy x and if the number of dollars increases rapidly, you get a sudden erosion of confidence.

Comment · 12 years ago

This is very helpful. How about handling validation and errors (e.g. unique account)?

Comment · 12 years ago

I agree that it will happen before B equals D but no one knows the tipping point ratio. In theory, a government can always argue right up to that point that, "we'll grow our way out of this."

Comment · 12 years ago

Not being sarcastic here.

2013 A = Debt is around: $17.5 trillion B = Debt Service: $416 billion C = Average Rate: 2.38% ($416 billion / $17.5 trillion) D = U.S. Tax Revenue: +/- $2.8 Trillion

Things won't get interesting until B approaches D.

So one way of looking at is if everything remained constant (which it won't) you'd need 15% interest rates on the current debt for debt service to approach tax revenue. If interest rates stay the same you could increase the debt to $128 trillion.

Reference: Debt: http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm Debt Service: http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm Tax Revenue: http://www.usgovernmentrevenue.com/

Comment · 12 years ago

> The fact that interest rates on Treasury bonds remain so low, despite our debt levels and despite certain political figures repeatedly attempting to force the US Government to default on that debt, is prima facie refutation of the idea that no one in the market actually thinks US debt levels pose a major macroeconomic problem in the short to medium term.

With respect, I don't think it's accurate that the fact that bond rates remain low correlates to evidence that there's no major macroeconomic problem. Just take a look at the Federal Reserve's balance sheet that was relatively stable for many years has quadrupled in 5 years.