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Culture War Roundup for the week of February 26, 2024

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I think this is actually worse than even kulak points out, for a couple of reasons:

  1. Is that I don’t think he’s accounting for mass quantities of state and municipal debt. Like yes, obviously some of these cities can be told ‘austerity or default’, but New York and DC can’t be allowed to degenerate into a 3rd world country, and anyways, the large holders of municipal debt(I think this is mostly insurance companies) need to get bailed out when Chicago and LA default. It is bad when State Farm starts passing out IOUs, after all. Besides, major cities almost definitionally have major political clout- the federal government will eventually pass out a large bailout for fiscal irresponsibility in municipal government. This will almost certainly skyrocket debt even more than he expects.

  2. Is declining work ethic. Hours worked and labor force participation are anywhere from anemic to declining, and that’s while being propped up by migrants who have lower human capital to begin with, leading to lower productivity. We can expect the economy to continue to not grow fast enough to keep up with spending because human capital inputs aren’t hitting the necessary levels.

  3. Interest rates, federal debt is mostly in short term bonds that get renewed every 5 or ten years. This raises the debt much faster than projected when interest rates are high, and I have no faith in interest rates to come down anytime soon.

The prime age LFPR is near all time highs.

https://fred.stlouisfed.org/series/LNS11300060

I don't know about working hours, I could only find this chart back to 2008 where the hours are a bit low but are coming down from an all time high.

https://fred.stlouisfed.org/series/AWHAETP