This rap video featuring ‘Alexander Hamilton’ vs. ‘Satoshi Nakamoto’ over the merits of centralized, government-fiat currency, versus decentralized cryptocurrencies.is surprisingly good; actually it’s very good:
Category Archives: Econ & Money
I never used to worry about the morality of teaching in a private law school. But as the debt burden grew on students, I began to worry, and charts like this one from Naked Capitalism make me worry even more.
Unfortunately, many public law schools now charge comparable tuition (but some still don’t).
In any case, student debt of this magnitude is not sustainable, and even if it were the drag on people’s futures and life choices seems excessive. I think the first part of the answer is to bring down the cost of public college: we should return to the era, not so long ago, where you could pretty much finance your college education from a summer job.
Law school prices may still be too high even in that scenario, but at least the overall consequences for students wouldn’t be as bad.
What we do with the debt overhang, meanwhile, is a wicked problem. To simply forgive the debt would be a windfall for the debtors. As a taxpayer, I could live with that; the problem that bugs me is that it seems so unfair to the people who didn’t borrow or who paid down their debt, and those who made sacrifices to finance education or chose less-expensive and perhaps lesser alternatives…or who chose to forgo education entirely.
As I write this in Q2 2018, non-agency US federal debt is estimated at $21,120,516,214,632.52, or about $64,727 per person in the US.
What fraction of that $21.1 trillion debt do you suppose is held by the Chinese? Go ahead, guess, I’ll wait.
No idea? Does this from a recent Reuters piece that ran in the NY Times help? (Hint: not really.)
China held around [redacted] trillion of Treasuries as of the end of January, making it the largest of America’s foreign creditors and the No. 2 overall owner of U.S. government bonds after the Federal Reserve. Any move by China to chop its Treasury portfolio could inflict significant harm on U.S. finances and global investors, driving bond yields higher and making it more costly to finance the federal government.
Ready to guess now? Answer below.
These pie charts come from the Washington Post Wonkblog. First there’s one symbolizing what US survey respondents said they though would be the ideal distribution of wealth:
Of course the GOP tax plan being rammed through Congress will just make all this worse.
Myself, I think Herbert Stein’s law applies here (“Trends that can’t continue, won’t.”). Sooner or later there will be a reaction, or more accurately a counter-reaction. If we are lucky, it will be systemic and electoral and we’ll get a progressive government. If we are less fortunate, and we just get just Third Way types or more gridlock, there’s a risk the counter-reaction will be more revolutionary and more violent. (And I don’t mean that the top .1% will get pie in the face.)
Elizabeth & Bernie do the tax bill:
I’ve long believed that neither Paul Ryan nor Mitch McConnell were quite nuts enough to fail to extend the debt ceiling. It’s not even mainly that McConnell at least likely understands how terrible it would be for the US to default on its obligations. No, it’s that failing to pass a debt ceiling increase would be political suicide for Republicans. Their major claim (however undeserved) to the public’s trust — that Republicans are the party of fiscal probity — would be exploded for a generation or more.
So I’ve been confident that if push came to shove McConnell runs something through by unanimous consent, or some other means. And I’ve been almost as confident that when Ryan finds he cannot tame the crazies in his own party, he accepts Democratic votes to get a majority. So while the debt ceiling vote is easily the biggest domestic political issue on the near-term horizon, and even today there is no obvious road from there to there (not to mention precious few legislative days when Congress is actually in session), I wasn’t worrying about it all that much.
But now there’s a new wrinkle: suppose Congress passes an eleventh-hour bill and Trump vetoes it? He hasn’t said he would in so many words, but the signs are there in his fued with McConnell; there may be no geological formation known as Trump Peak, but Trump pique could be a giant crater.
After all, Trump has tweeted that he wants the budget to be tied to funding for the Gran Muralla, and wouldn’t mind a government shutdown if he doesn’t get it. In terms of really dumb ideas, t’s not that far to the debt ceiling. And Office of Management and Budget director, Mick Mulvaney originally argued that a US default was not such a big deal — although he’s now recanted and said he wants it raised too.
If there’s a veto, and I think at this point there’s really nothing we can’t put past the guy, we don’t just need a majority in both houses, we need a super-majority — and maybe in a hurry. Are the votes there?