Is there still a global chip shortage? Will prices bounce back to the way they were on par with pre-covid inflation rates?
no because inflation prices are usually kept long term. It's the rate of inflation that economists refer to when we are in a inflationary period. Consumers get used to price point and corporations and businesses have no incentive to go back to old pricing because....why would they? Basic capitalism.
Okay, that hyperfocuses on supply and ignores demand...notably why there's still high enough demand to support the new price point.
That would be an issue.... if we get there. As of 8/24 interest payments is ~17% of the debt. And this snapshot is when we have had highest interest rates (highest in ~40 years) with interest rates starting to creep lower.
The irony of course is we didn't make the printer go brrrrrr and we didn't really toss out a bunch of money from a helicopter after 2008 crash.
I think we tend to downplay what the American consumer along with low unemployment can do. There are certainly lots of folk struggling in America, but clearly there are a lot of folks not.
At a projected $892 billion in 2024, interest payments on the federal debt represent 3.1% of GDP in 2024. Since 1940, net outlays for interest have never exceeded 3.2 percent of GDP.
another parroted claim by Invisible, obviously is there a better eg of “The pot calling the kettle black” ! reminiscent of Invisible's parroted claim of the Fed wrecking its balance sheet. when asked to explain/elaborate his claim, Invisible was unwilling/unable do so, other than saying "do your own research"
as it relates to the US economy, how has it matter ? at the time, W's deficit was larger than the cumulative deficit that all his predecessors had generated. his incompetence led to the bankrupcy of the US financial industries, massive job loss and the 2nd depression in US history. Biden's deficit is bigger than W but the GDP continues to grow every quarter, above expectation positie job creation every month for 44 consecutive months, in the process, gaining > 15 million jobs unemployment at historic low, inflation, after reaching a high in late 2022, has declined, approaching the 2% target deficits matter a lot more if you don't have the Global Reserve currency, the US dollars. US GDP is ~~~ 25% of the global GDP; yet over 60% of global commerce are settled using the US dollars.
So as a person that is admittedly not that bright on deficits. Can someone answer these questions for me. How does a government pay off a deficit? If we owe a country do we as a country wire them cash? Pay Pal? If a country owes us how do we get our cash? Do we hire a collection agency? Is this real money? I threw some comedy in there but am interested how all of this works.
When the federal government spends more than it receives, it borrows money (think treasury bonds, etc). Whoever buys that bond is lending the government money and they collect interest and then when the bond matures, it is paid off by the government (usually with more borrowiong unless the government happens to run a surplus)
Sure. A government does not pay off a deficit. A deficit happens when a government spends more money than it collects. Deficits are added to the debt. Whoever owns a treasury bill or other obligation from the government collects it as you would any obligation. Wire transfer, check, whatever. It doesn't make any difference. See above (though often we just forgive the debt). No, we have the IRS, which is like a collection agency on steroids. Yes.
The larger the deficit, the larger the upcoming inflation. This only works when the US has the global reserve currency status... as investors (mainly foreign countries) buy up the debt that is issued to finance the deficit. If the US were not the global reserve currency, we'd go broke and the economy would collapse under the weight of the debt. This is why we attack countries and leaders that try to move away from the dollar -- especially in the oil trade. Ask Saddam Hussein or Muammar Ghaddafi. What the BRICs are doing right now should be troubling to every American investor.
once again, Traitor Geroge is spewing BS post WW2, the highest inflationary period in the US, span the late-Nixon, Ford and Carter admins, where inflation got as high as 10+% even after Trump ineffective trade war and COVID shutdown, current deficit is probably close to 10 X that of the Nixon, Ford & Carter era, inflation under Biden never got above 9%. from the high of just below 9%, inflation has declined to the 3 % range you can't possibly be this ignorant some vivid eg of Bidenomics giving the BRIC de-dollarizers the finger Even Chinese Exporters Don’t Want the Chinese Yuan, same for the Indian Ruppee and Russian Ruble The de-dollarization initiative kick-started by BRICS is becoming harder to achieve due to the rising US dollar. Exporters and businesses are at the receiving end as BRICS promised to uplift the Chinese Yuan and local currencies for trade. In addition, currency investors believe that the Chinese Yuan will only dip further against the US dollar The US dollar is so strong that the de-dollarizers' central banks just keep loading up on gold . The BRICS and Their Dollar Dilemma In Biden's America---flexing its muscles as having the global reserve currency---The US economic engine has pulled in an increasing share of global capital In the face of calls around the world to diversify out of the dollar in recent years, the US has nabbed almost one-third of all the investment that flowed across borders since Covid struck. the (lunar) new year has not even begun, 2025 will be the year of the snake, China Is Already Taking Desperate Steps Up Measures to Support Its Tumbling Currency
You misread my point and you don't understand economics. My point was "the larger the deficit, the larger the upcoming inflation". Very true. You erroneously then made an argument in response that inflation has been higher when the deficit has been lower. That's irrelevant and not the point. You got my point backwards, and incorrectly. Many things contribute to inflation -- such as energy costs, regulations, supply shocks, etc. All things equal (ceteris paribus), a larger deficit will lead to larger inflation. Very true. You may or may not have the intellect to even understand what I just wrote. GOOD DAY
Why does Trump want to remove the debt ceiling limit? Whoops. I guess tax cuts don’t pay for themselves. Whoops
