US economic decline

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billvon

Valued Senior Member
As most of you have heard, the US has lost its AAA credit rating from all three rating organizations due to, in the words of one of those organizations:

"the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns . . .The new outlook also takes into account institutional features, including the constitutional separation of powers among the three branches of government that contributes to policy effectiveness over time."

This will make it harder for the US to borrow money to increase its deficit - which is unfortunate, because Trump is asking for (and will likely get from the Senate) a $5 trillion increase in the debt limit. The money they CAN get will come at higher interest rates and with more strings attached, which will of course accelerate the increase in the deficit.

In other news, the company Wolfspeed (formerly known as Cree) is declaring bankruptcy. This was a company that was formed to bring cutting edge power electronics IC's back to the US, and had a foundry here that was pumping out power devices, mostly for EVs and solar applications. With the CHiPS act being cancelled by Trump, and the loss of EV support, EV manufacturers are revising their estimates - and Wolfspeed's business plans no longer make sense. So they will fold and that IC manufacturing will go back to Taiwan and South Korea.
 
The first one was about 15 years ago and the one after that was about two years ago. All have largely been symbolic as will this one, I'd guess.

I agree that with increasing debt, which basically started with the New Deal, it does lead to economic decline in one form or another.
 
Fun fact: Calvin Coolidge lowered the ND 17%. More than any other president. Not sure a Coolidge could get elected now.
 
What would really lower the debt is accountability. Arguing over ideology rather than accountability is what allows the debt to go up, up, up.

If any policy (left or right) had to be paid for with a tax increase, there would be a lot less spending. On the local level, if voters had to live with the consequences of their policies, we would have a lot better policies.
 
Seattle said:
If any policy (left or right) had to be paid for with a tax increase, there would be a lot less spending. On the local level, if voters had to live with the consequences of their policies, we would have a lot better policies.
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That's basically a balanced budget law. Which would never pass. But at this point I'd even be OK with a law that stated the debt could only increase at twice the rate of inflation or something.

One of my pet peeves are the ballot measures that state "Your taxes will not go up! This will all be paid for by selling government bonds." Which of course just pushes the tax off for a little bit.
 
billvon said:
That's basically a balanced budget law. Which would never pass. But at this point I'd even be OK with a law that stated the debt could only increase at twice the rate of inflation or something.

One of my pet peeves are the ballot measures that state "Your taxes will not go up! This will all be paid for by selling government bonds." Which of course just pushes the tax off for a little bit.
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I'd be OK with anything better than the current situation. We don't need a balanced budget on a yearly basis but we need something less than productivity increases to do much.

My pet peeve is people voting on something for which they have no stake in or voting for something where they don't have to live with the results.
 
Tuesday June 3, 2025, Elon Musk and I agree on something. The ketamine must be working!

From AP news:

Tech billionaire Elon Musk, who just left the Trump administration, blasted the Republican tax cuts and spending plans that passed the House.

“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk posted Tuesday on X. “Shame on those who voted for it: you know you did wrong. You know it.”

Musk continued that the bill “will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America citizens with crushingly unsustainable debt.”
 
TheVat said:
Tuesday June 3, 2025, Elon Musk and I agree on something. The ketamine must be working!

From AP news:

Tech billionaire Elon Musk, who just left the Trump administration, blasted the Republican tax cuts and spending plans that passed the House.

“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk posted Tuesday on X. “Shame on those who voted for it: you know you did wrong. You know it.”

Musk continued that the bill “will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America citizens with crushingly unsustainable debt.”
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That's hilarious, he looks like he's desperately trying to win over the public. Someone said, the only way would be for him to use his entire wealth to undo what he did and then some.
 
It is funny. Sort of like an EV maker who discovers the new budget will terminate subsidies for EV buyers and then experiences a sudden pang of conscience about deficit spending and national debt.
 
Funny too, although he's walking away from Washington, it's with a mittful of government contracts worth billions.

Damn, don't you sometimes wish to be more like these people?
 
The interesting thing, to me, is that much of what is argued about is a "first world problem" or a self-created problem and often not even a problem.

For instance, we have a broader geographical group here than on some forums. At a minimum we have those from Australia, the UK, the EU, Canada and the US. Most are probably in the "Progressive" wing as it would be looked at here in the US but not all.

Some like to argue that the government is better in the UK, EU, Australia or wherever. Some from the US want that system and some from those countries come to the US because they want more upside, most don't.

Yet, in the US, you still have a choice. You can work for the largest employer in the country, the US government and you'll have most of the things you like about the EU system. One third of our economy is government, 2/3rd is private.

The private sector is why we have a larger economy than most but we do have those other choices here too. It's not necessary to impose one person's preferences on others.

Therefore, there isn't really much to argue about (other than personalities). You want more job stability, more days off, a better pension...work for the government. I'm guess most/many Progressives already do work for the government in one way or another, either directly or through funding.

I'm also "guessing" that most skilled immigrants leaving professions in the EU for the US aren't largely coming to work for our government. Some are in high tech areas but most probably aren't. They are coming here for more upside (more money).
 
Wizard of Whatever said:
When you let your domestic companies move production out of the country and still sell their products at home, what do you expect.
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A global economy, which makes people richer than a more protectionist approach.

The problem isn't that China is building stuff for the US. The problem is that we are no longer good enough (smart enough / visionary enough / effective enough / innovative enough) to sell stuff to THEM. THAT is the problem we have to fix. Trying to penalize Americans for not buying American is exactly the wrong solution; we should be encouraging them to invent the new semiconductor process that we sell to China.
 
billvon said:
A global economy, which makes people richer than a more protectionist approach.

The problem isn't that China is building stuff for the US. The problem is that we are no longer good enough (smart enough / visionary enough / effective enough / innovative enough) to sell stuff to THEM. THAT is the problem we have to fix. Trying to penalize Americans for not buying American is exactly the wrong solution; we should be encouraging them to invent the new semiconductor process that we sell to China.
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Проблема в том, что Китай не должен укрепиться. Посмотрите на их идеологию. Она вам нравится?
 
ольга said:
The problem is that China should not become strong. Look at their ideology. Do you like it?
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Nope.

The best way to fight that ideology is to make ours better, and make sure we are more successful/prosperous with OUR ideology. Then sell stuff to THEM so they see it.

The worst way to fight that ideology is to try to make them miserable while damaging ourselves. That just proves to them that we are the enemy and our ideology sucks.
 
billvon said:
Nope.

The best way to fight that ideology is to make ours better, and make sure we are more successful/prosperous with OUR ideology. Then sell stuff to THEM so they see it.

The worst way to fight that ideology is to try to make them miserable while damaging ourselves. That just proves to them that we are the enemy and our ideology sucks.
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Вы и так сделали их намного более процветающими, чем они были ещё несколько десятилетий назад, построив там современные предприятия, и превратив отсталую феодальную страну в страну со второй экономикой в мире. Но они не считают, что они обязаны этим вам, они считают, что обязаны этим своей коммунистической партии.
 
ольга said:
You have already made them far more prosperous than they were a few decades ago, building modern factories and turning a backward feudal country into the second largest economy in the world.
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Good! Since the 1970's China has become more and more capitalist, with the communist party holding less and less control over business. This is progress.

But they don't think they owe it to you, they think they owe it to their Communist Party.
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As long as they support a free market, civil rights etc I don't care what they believe. Let them believe in the Flying Spaghetti Monster if they want. It's what they do that counts.
 
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