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So we hit the debt limit...

Started by MadImmortalMan, May 17, 2011, 01:18:23 PM

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Admiral Yi

Proposition 3: the US is running annual deficits that put it on the path to unsustainibility in the medium term.

This is consistent with proposition (fact) 2.

Unless you think the model of debt/GDP that determines risk premiums for every other country in the world somehow doesn't apply to the US.

frunk

Quote from: Admiral Yi on September 08, 2011, 12:52:22 PM
Proposition 3: the US is running annual deficits that put it on the path to unsustainibility in the medium term.

This is consistent with proposition (fact) 2.

Unless you think the model of debt/GDP that determines risk premiums for every other country in the world somehow doesn't apply to the US.

Is medium term further than 10 years out?  Otherwise I would expect the 10 year yield to be going up.

MadImmortalMan

US debt is still the safest crap investment out there with Europe imploding. That's why the rates are low. We have to take our turn in the bankruptcy line, you see.
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers

Admiral Yi

Quote from: frunk on September 08, 2011, 12:58:27 PM
Is medium term further than 10 years out?  Otherwise I would expect the 10 year yield to be going up.

Medium term is maybe 3 to 5ish.

Take a look at the historical PIIGS yields before the shit hit the fan.

The Minsky Moment

Quote from: Admiral Yi on September 08, 2011, 12:52:22 PM
Proposition 3: the US is running annual deficits that put it on the path to unsustainibility in the medium term.

That would imply a much higher yield on the 10 year if the market efficiency hypothesis holds.

Also the 30 year is at 3.35%.  By way of historical context, average inflation rates in the US over the past 75-100 years are in the vicinity of 3.5 percent.
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

HisMajestyBOB

Quote from: MadImmortalMan on September 08, 2011, 12:02:47 PM
Oh hell. Here we go again.




Quote

Sen. Jon Kyl (R-AZ) threatened to quit the Super Committee Thursday morning Bloomberg reports — hours after the deficit cutting group's first meeting — telling DC conference that he would leave the committee before accepting any cuts to defense spending.

Bloomberg is reporting Kyl said the committee can find the required $1.5 trillion in savings without further cuts to defense spending.




Of course. We can solve the debt problem by just cutting Planned Parenthood and PBS - once we are proper conservatives, God will shower us with money!
Three lovely Prada points for HoI2 help

MadImmortalMan




The next treasury auction will breach the new debt ceiling.
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers

The Minsky Moment

Another $500 billion kicks in this month unless there is a disapproval vote.
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

Neil

Well, if Jon Kyl is on the committee, I think it's pretty much doomed to failure.
I do not hate you, nor do I love you, but you are made out of atoms which I can use for something else.

Admiral Yi

Quote from: Neil on September 08, 2011, 06:46:48 PM
Well, if Jon Kyl is on the committee, I think it's pretty much doomed to failure.

Take him off and the probability of agreement would skyrocket to zero.

Razgovory

Quote from: Neil on September 08, 2011, 06:46:48 PM
Well, if Jon Kyl is on the committee, I think it's pretty much doomed to failure.

That was the idea.
I've given it serious thought. I must scorn the ways of my family, and seek a Japanese woman to yield me my progeny. He shall live in the lands of the east, and be well tutored in his sacred trust to weave the best traditions of Japan and the Sacred South together, until such time as he (or, indeed his house, which will periodically require infusion of both Southern and Japanese bloodlines of note) can deliver to the South it's independence, either in this world or in space.  -Lettow April of 2011

Raz is right. -MadImmortalMan March of 2017

Neil

Quote from: Admiral Yi on September 08, 2011, 07:02:04 PM
Quote from: Neil on September 08, 2011, 06:46:48 PM
Well, if Jon Kyl is on the committee, I think it's pretty much doomed to failure.

Take him off and the probability of agreement would skyrocket to zero.
Well, if the Republicans intend to torpedo an agreement, then what's the point?
I do not hate you, nor do I love you, but you are made out of atoms which I can use for something else.

Admiral Yi

Quote from: Neil on September 08, 2011, 10:04:32 PM
Well, if the Republicans intend to torpedo an agreement, then what's the point?

:lol:

If 3 guys don't agree with 3 other guys, who's torpedoing whom?

Neil

Quote from: Admiral Yi on September 08, 2011, 10:10:55 PM
Quote from: Neil on September 08, 2011, 10:04:32 PM
Well, if the Republicans intend to torpedo an agreement, then what's the point?
:lol:

If 3 guys don't agree with 3 other guys, who's torpedoing whom?
Depends on who is more insane.  If Jon Kyl is in the room, he's the one torpedoing.
I do not hate you, nor do I love you, but you are made out of atoms which I can use for something else.

grumbler

Quote from: Neil on September 08, 2011, 10:04:32 PM
Well, if the Republicans intend to torpedo an agreement, then what's the point?
The point is that the Republicans will be torpedoing an agreement that, under any conditions, is better for them than the default, no-agreement result (which still cuts spending, but not in ways the Republicans will like).  Hopefully, Kyle and his fellow morons will prevent an agreement, and their owners (who will be badly hurt by the default cuts Kyle and Co. will have forced) will fire them and buy themselves some sane Republican Senators and Congressmen.

The only path to sanity for the country, it seems to me, is for the newly-empowered business owners of US politicians to realize that creating batshit-crazy pawns in Congress is a losing proposition, and they switch to creating and emplacing saner ones.  It is sure the Democratic legislators, who are just as wacky, will not be replaced by their owners.
The future is all around us, waiting, in moments of transition, to be born in moments of revelation. No one knows the shape of that future or where it will take us. We know only that it is always born in pain.   -G'Kar

Bayraktar!