Felagund
19hr ago
But in order to sell promises and get real goods, you need promises to sell. Promises are expectation of future goods. If you don't uphold those, you'll have to stop selling promises. This makes it harder to get the real goods you want, since you can no longer just offer promises and then pay them back.
Promises are better—that is, you can trade them for more—the more trustworthy you are. Being more profligate with your promises than you can afford tanks the value of your promises and makes it harder to keep getting those real goods from them.
Worst case you just inflate the pain away.
This is precisely where the problem lies. Yes, you can always just inflate it away. The problem is that this has harmful effects. Namely, a change in trade balance. A high inflation rate will mean nobody wants their wealth in dollars, worldwide. A lot of dollars are overseas. For the past while, we've been able to get more stuff from importing than we export, because everyone wants dollars. This is great. Just now we're at a spot where if that changes, suddenly the economy will be a lot worse, as everyone tries to shed dollars, making everything more expensive in dollars, beyond just the direct effect of the increased money supply on inflation. Because the whole US runs on dollars, dollars going down relative to the world economy beyond just the direct effect of inflation is bad. It becomes harder to buy anything, especially things made overseas.
A lot of countries have tried "inflate the pain away." How did it work for them? (Hint: pretty disastrously)
Yes, they didn't control the world's reserve currency. But give the US dollar enough inflation, and it will no longer be the world's reserve currency, as everyone drops it.
Felagund
1d ago
How much of current AI work can be traced back to Yudkowsky influencing people to work on AI?
I was trying to explain to friends who the guy is, but I don't quite have a sense of the scope of his influence.
Felagund
2d ago
So you're saying, yes, the move is to pressure others to buy US debt or otherwise prop up the otherwise insolvent US government.
I'm afraid I mostly didn't track what you were saying in that second-to-last sentence.
worthless promises
Promises only have worth because they can be trusted.
Felagund
3d ago
Sure, debt's just a human construct. But it's one that we currently depend on heavily in order to do things. Like, yeah, we can just not pay people (ignoring the constitution for a second), but then we'll have a harder time raising enough money to do things, because they won't trust the US's promises. (And yes, you can do things without money, but money's kind of how our whole economic system runs, and it's hard to have efficient alternatives.)
If we have the raw resources and the might to decide how they get divvied up, the rest is just semantics.
To be clear, you're recommending something like a tribute system, since you've mentioned the military? Or is this just divvying up domestic goods? The US is a net importer, I believe. (And incentivizing new innovation and production is an important role of an economic system beyond just dividing existing goods.)
Felagund
3d ago
No, you're right, you were reasonable in that exchange, and I probably shouldn't have said that. I was the one less able to control my tongue keyboard. I guess I was thinking of other comments of yours. If all your comments were like the ones in that exchange, well, I'd prefer it if you'd get further into the weeds of what precisely was going on, but you were certainly civil enough.
If by extend and pretend, you mean the current policy, doesn't that end up requiring more of the world's resources each time, and is growing at a faster rate than the US's or world's economy?
I think infinite borrowing can be done at a sustainable rate; just not the one we're at. If it's below inflation, or below economic growth, there's not much of a problem. We're just in a much worse situation than that, and I think the way you tell that isn't by looking at who has e.g. the largest military, but at interest rates, amount of government spending spent on debt, rates of economic growth, etc.
Felagund
3d ago
Sorry, I kind of have to agree with ArjinFerman—at least, it would be disastrous for the forum if everyone started adopting your tone and habits of response. You're consistently above-average in antagonism and dismissiveness. And this definitely is one of the factors in you drawing more downvotes—it's often the reason if ever I downvote you. That of course doesn't address the overall problem of voting based on whether people like it driving dissenting views away, but it could make a meaningful difference in your particular case.
So I guess, two.
Felagund
3d ago
Are there any particular current events you'd like hot takes on, at the moment?
Felagund
3d ago
We really need a new poll. Maybe I'll ask Trace what his old questions were and see if I can put a form together.
Felagund
4d ago
Good relationships also exist.
Got any tips for staying sane while single?
What's your life ordered around? Is there anything you care about? How best can you make the world better for your having been here?
Living for something is significantly better than living hedonistically.
(I submit as an option, Pascal's wager, for your consideration.)
What do you do for fun?
Have friends whom I can talk to about the things I care about or take interest in. Play board games. Spend way too much time on the internet.
Quit with the magical thinking.
There is always a mechanism. It might change, be fluid, sure. But somewhere, somehow, if the US wants to do stuff, it needs to get people willing to do stuff. And there always, always, must be some mechanism by which that's happening, some way or ways to motivate people to put labor and materials toward whatever it wants.
What I'm asserting is that the current method (pay for it with dollars, using promises of future dollars in order to get enough dollars to cover what taxation isn't sufficing for) is being done in an unsustainable fashion, and will have to stop, or otherwise be revised eventually.
I was saying that that problem would eventually be remedied by printing money, which should have the effects I discussed (A worldwide shift away from dollars, to some extent).
(Heavy taxation or cutting spending are also possible, but probably harder to get through the political process.)
So what are you suggesting instead? You keep bringing up force. Are you suggesting that we'll impose a tribute on other countries? That's possible. (Though definitely a big departure from now, when we give countries a ton of money, instead of exacting it)
Edit: If innovation in AI or something causes sufficiently large US-centered economic growth to increase tax revenue enough to pay for things, that could also work, provided it's not also accompanied with corresponding spending increases.
Edit 2: If the US does impose tribute, ancient Athens might be a cool comparison.
Felagund
5d ago
You keep saying this, and not addressing what I said about the mechanisms of how the US would end up in a situation of scrambling to avoid default.
Which point in that list was wrong (following "that is:")?
What is the actual mechanism by which the US can keep borrowing? Who, specifically, wants US dollars, and will keep buying up our debt indefinitely, even as it continues to grow to be a larger and larger share of US and world GDP?
Instead of just giving a, "we'll be fine, someone will stop it," as you have us sleepwalk into disaster.
Felagund
5d ago
The US will never default, we are in a better place than all other countries, hence the strong dollar.
Okay, the US won't default, but at some point it'll need to start printing money, at least, to avoid it.
That is:
The US wants to pay for stuff.
To raise funds to do so, it sells bonds.
Demand for bonds is not limitless.
US spending keeps growing.
Eventually it will hit the limit of those willing to buy US debt.
At that point, it must either print money to pay for things, or fail to pay for things (that is, default).
Unless you think all other players are totally irrational investing in it?
It wouldn't surprise me. But really, all you need to buy a bond is just to think that things will be fine within the lifetime of the bond, which is entirely possible even if you think it's going to collapse in a few decades.
If we are defaulting, the rest of the world has already fallen apart and it doesn't matter. Like people who buy gold for the apocalypse...when what you really need is beans and bullets.
I see no reason to think the former is true. And the latter depends heavily on what kind of apocalypse you're in.
Felagund
6d ago
I don't expect the demise of the dollar before the US comes close to defaulting on its debt, which is still a ways away. But the deficit's steadily been growing relative to GDP. (And even then, I don't expect a total collapse.)
Felagund
6d ago
But how much does that actually matter to the value of the dollar?
My guess would be that the general value prospect to people and countries abroad of holding dollars are that:
- Dollars have low inflation, so they're one of the better currencies to sit on.
- The US is fairly reliable, as nations go, so it can be expected to remain stable.
- Dollars are useful for trade with the US, and the US is an important part of the world economy.
- Other places and people want dollars too, so they work well as a currency.
But if 1 fails (due to, say, running out of people willing to finance US debt, meaning that we need to start printing money to fund things or pay back debtors), then some will drop the US dollar for other currencies. This will drive down the cost of the dollar, that is, cause inflation, which will lead to more of the same.
I don't expect 3 and 4 to go anywhere, but I think 1 and 2 could change, in a way that would meaningfully affect demand for dollars, and hurt US prosperity.
That said, that's mostly just from me thinking things through myself, not something better vetted, so is there some reason that I'm wrong, or something I'm missing?
Felagund
6d ago
I'm reading the general lesson of this is that:
Republicans (and congressmen in general) should assume that government agencies will not listen to their intent and do everything they can to interpret every law passed in as left-conforming a way possible.
Accordingly, minimize dependence on government agencies for one's legislative agenda, and prefer to shrink power when possible.
Felagund
6d ago
To the owner of the self-driving car would be another option, maybe? This seems like it would better work with cars that have a full self-driving mode, but could also be driven ordinarily.
I'm not convinced that self-driving cars would be banned, instead of just way more expensive. It would depend on how much liability they would tend to have.
Felagund
6d ago
This might run out, with devastating effect, some day.
If people lose confidence in the US dollar, suddenly they'll try to get rid of it, leading to an increase in domestic supply and dramatic inflation, and foreign goods in general will be much more expensive.
Felagund
6d ago
Wait, she's the one who's the problem, and not him? I thought she was just trying to bring up the problem that those who profess that we can just print money and not worry about debt don't understand why we borrow, showing that there's a problem with their model.
And a terrible long term one. This does not belong in the Overton window.
Let me try to understand your model. You are saying something like: the US prints money to buy foreign goods. (Or alternatively, buys loans which it expects to finance by printing money later.) The net effect of this is that we have more goods in the US.
Two thoughts on this:
High inflation is risky, because that could affect how desirable dollars are, which could be bad for trade.
Inflating currency doesn't increase purchasing power, if ownership of it is distributed the same way as before. So if I understood your model rightly, that you want to use it buy foreign goods and services, then the inflating part isn't relevant so much as the spend a lot of money on foreign goods part. But I don't think there's really any reason to spend more resources (Yes, resources. They'll use those dollars, or at least, many of them, if they're not sitting in a foreign exchange reserve or something. And if in a foreign exchange reserve, it's only in expectation of future value, that is, resources.) on foreign goods rather than on development of US resources and investment into our own economy. So why not just let the price system allocate things efficiently, as it will tend to, rather than attempt to force things with government spending funded by a tax on dollars?
What do you think of all the places that decided to hyperinflate their currency? Did it work out well for them?
Namely?
Sure. That's just not what your policy does, I don't think.
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