I don’t disagree with anything there. I think there are lots of reasons people end up with that line of thinking. Lots of reasons.
Do you think there really are more doom mongers than historically? Or have the threats just changed?
I think parents will always organise institutions because they are a requisite for keeping children safe.
Anarchists are generally teenagers and young adults, and people soon grow out of this once they consider their own children living in a world with malevolent actors.
The first social problem to solve is malevolence.
The preindustrial deforestation of Europe is 10x the atmospheric CO2 impact than industrial emissions.
I think we start gaming out various scenarios now.
I have no idea where we are heading but I can easily imagine half a dozen very different worlds in 5-10 years time.
But how do you tax AI?
It can move tax jurisdiction just as frictionlessly as capital. It’s not like oilfields.
Maybe giant data centres will move towards low cost energy locations?
But AI is likely going to be extremely difficult to tax and a huge amount of the profit will never be repatriated or taxed.
In fact it’s probably quite likely that AI destroys the tax base of most countries.
The system violation is when the total debt grows faster than GDP in nominal terms.
That’s where USA is after COVID.
Debt is growing at $1.4 trillion per year (the deficit).
GDP is $26 trillion.
$1.4 trillion / $26 trillion = 0.0538
Which means US GDP now has to grow at 5.4% CAGR in order for the US government to avoid hyperinflating the USD under current tax and spending levels.
If you think a sustainable GDP growth rate is 3% then that’s a maximum sustainable deficit of… $26T x 0.03 = $780bn.
Now the Congressional Budget Office is predicting the opposite, they’re saying the deficit is set to double to $2.8 trillion within a decade as population ages.
Structurally the US is racing into a brick wall. It has been for a long time but only in terms of rates. We are now in the era of the national debt nominally outrunning GDP.
The window to recover from this is probably tiny.
Federal spending is $6 trillion and the deficit is $1.4 trillion.
The US would need to scrap its entire military budget ($800bn) to bring the deficit down a level where 2.7% CAGR is enough to stay solvent.
I don’t see that level of tax rises and spending cuts happening any time soon.
The Congressional Budget Office’s official forecast says the U.S. deficit is $1.4 trillion for 2023 and that the deficit will double to $2.8 trillion by 2033.
That’s the official forecast right now.
That means without any future crisis the US public debt is set to hit $50 trillion in 9 years.
There’s nobody out there to buy that, so the Fed will have to monetise it.
The math no longer works.
If interest rates stabilise at 4% then that’s a further $2 trillion per year just on debt servicing.
Following COVID, the US economy now has to grow at 5.4% CAGR just to keep the US public accounts solvent.
That doesn’t sound achievable to me.
What a packed week that was!
1). Nostrica 1 happens in Uvita, Costa Rica
2). Fed crushes rates even higher as shoes fall
3). DB maxes FX swap lines
4). Greenpeace accidentally commissions epic Bitcoin artwork
5). Yellen calls snap 🚨 emergency 🚨 meeting of Federal Reserve banks.
6). Former POTUS is perp walked but state bottles it as massive overreach.
7). Mexico trolls woeful state of USA geopolitics
8). Putin drives around Ukraine
9). Xi brokers peace between KSA and Iran
10). Chat-GPT continues to make much of the above feel increasingly moot.
What did I miss?
When can we buy a tube crown 👑 like this?
🟠🟠
💀
It’s a Greenpeace protest against Bitcoin.
Another Friday and it’s Deutsche Bank down 11% going into the weekend as Credit Default Swaps of banks spike again.
Probably nothing.
?cid=2154d3d7gtmhbew3xxmnhcfxq7yyrjxewxbtm1i65kgx6fj2&rid=giphy.gif&ct=gSustainaboat.
Is Apple Card good?
Will this website have a boat?
Wow this is humbling, “gruntled” is actually a word? 🤔
