I got 25% of the way through this article and thought, "Damn, this is good.." So I scrolled to the top to check the author and remembered I subscribed to Philip Su a few weeks ago - this reaffirmed my original choice to subscribe.
What about bringing down the cost of existing buckets? Medicare is 25%, but a night in the ICU costs $60k compared to $6k in developed countries, an X-ray costs $800 rather than $8. We need to fundamentally look at monopolistic practices and market structure. Same goes for defense spending and procurement.
Quick question about the "growth" option. While perhaps as politically charged as increasing taxes, wouldn't increasing the population (birthrate is probably too hard, but through immigration) help to push the problem down the road for a while? It seems like free money if the people are healthy workers?
My understanding is that even unregulated immigration typically has little effect on per capita GDP. But that means that an increase of 1M immigrants add $100B to our GDP. Put another way: the debt grows at about 2% of GDP per year (https://fred.stlouisfed.org/series/GFDEGDQ188S). If we increased population by an additional 2% per year (~6M extra immigrants), we'd expect debt growth to stabilize (assuming no corresponding increase in entitlements and no increase in tax revenue) relative to GDP. If the immigrants were healthy taxpayers the net effect is hugely beneficial to government finances. Conversely reducing immigration / population growth has the opposite effect. All other things being equal, the expectation is that it should reduce GDP and thus increase debt/GDP ratio. This reasoning has actually been used as an accusation against the previous government's immigration policy (that unregulated immigration was "juicing the economy"). But put in the context of the points that you've laid out here, it's interesting to reflect that if the goal of the government is to avoid the 3 options that you laid out, it needs to seriously strategize about real economic growth, and population is actually perhaps the easiest knob a democratic government can turn that affects growth positively or negatively.
I suspect the trick to growing GDP via immigration likely hinges on ensuring not only net GDP growth (which feels very likely... in fact, downright guaranteed), but also increased average wealth/income per capita.
There is also “just default” (though you could argue printing money is default in slow motion). It isn’t just the US needs to spend less; it is that creditor countries need to spend more on US products and services. The one thing other countries might really feel they need right now is US defense technology. The much needed tough love to US allies on how they need to spend more on defense should have come with an offer to sell them the best US defence capabilities available. Instead they are told by POTUS that their soldiers are cowards and the US doesn’t want to sell defense hardware to friends because “one day they might not be our friends”.
I still don't understand why the budget process is entirely separate from (and after) the "passing laws that will spend that money" process in US government.
Did you ever watch "Money as Debt", an inconveniently long YouTube video posted back in the 90s (I think)?
I'm suddenly reminded of Norway's Sovereign Wealth Fund. Amazing that leaders took the simple & powerful approach.
I got 25% of the way through this article and thought, "Damn, this is good.." So I scrolled to the top to check the author and remembered I subscribed to Philip Su a few weeks ago - this reaffirmed my original choice to subscribe.
Keep up the great work!
What about bringing down the cost of existing buckets? Medicare is 25%, but a night in the ICU costs $60k compared to $6k in developed countries, an X-ray costs $800 rather than $8. We need to fundamentally look at monopolistic practices and market structure. Same goes for defense spending and procurement.
Absolutely. There’s a ton of room for fixing broken markets, restoring competition, rooting out rent seeking, streamlining regulations, etc.
Speaking of this, this should be an interesting series: https://x.com/ashishkjha/status/2015771045337182360
Quick question about the "growth" option. While perhaps as politically charged as increasing taxes, wouldn't increasing the population (birthrate is probably too hard, but through immigration) help to push the problem down the road for a while? It seems like free money if the people are healthy workers?
I do believe a points-based system of attracting the world’s top talent would be hugely beneficial.
My understanding is that even unregulated immigration typically has little effect on per capita GDP. But that means that an increase of 1M immigrants add $100B to our GDP. Put another way: the debt grows at about 2% of GDP per year (https://fred.stlouisfed.org/series/GFDEGDQ188S). If we increased population by an additional 2% per year (~6M extra immigrants), we'd expect debt growth to stabilize (assuming no corresponding increase in entitlements and no increase in tax revenue) relative to GDP. If the immigrants were healthy taxpayers the net effect is hugely beneficial to government finances. Conversely reducing immigration / population growth has the opposite effect. All other things being equal, the expectation is that it should reduce GDP and thus increase debt/GDP ratio. This reasoning has actually been used as an accusation against the previous government's immigration policy (that unregulated immigration was "juicing the economy"). But put in the context of the points that you've laid out here, it's interesting to reflect that if the goal of the government is to avoid the 3 options that you laid out, it needs to seriously strategize about real economic growth, and population is actually perhaps the easiest knob a democratic government can turn that affects growth positively or negatively.
I suspect the trick to growing GDP via immigration likely hinges on ensuring not only net GDP growth (which feels very likely... in fact, downright guaranteed), but also increased average wealth/income per capita.
There is also “just default” (though you could argue printing money is default in slow motion). It isn’t just the US needs to spend less; it is that creditor countries need to spend more on US products and services. The one thing other countries might really feel they need right now is US defense technology. The much needed tough love to US allies on how they need to spend more on defense should have come with an offer to sell them the best US defence capabilities available. Instead they are told by POTUS that their soldiers are cowards and the US doesn’t want to sell defense hardware to friends because “one day they might not be our friends”.
I still don't understand why the budget process is entirely separate from (and after) the "passing laws that will spend that money" process in US government.
Did you ever watch "Money as Debt", an inconveniently long YouTube video posted back in the 90s (I think)?
I'm suddenly reminded of Norway's Sovereign Wealth Fund. Amazing that leaders took the simple & powerful approach.