Does the US today resemble the late-stage Soviets?

[BradStevens]

The underlining issue is the money is broken. There are similarities between all declining empires because they all end going broke. Ferg is seeing that, but not understanding it.

In the current debt based system a majority of the wealth flows to the top and the more scare assets become harder and harder for a majority of the population to afford, for example housing. The natural state of a free market is deflationary. It has to be. The only reason we have inflation is because they print money and it ends up stealing a large percentage of the productivity gains, that we all should be enjoying. The two charts below are why people are pissed off and why we’re declining. People are unable to articulate the problem, but they feel it and experience it everyday. Unfortunately, we all end up getting pissed off and pointing the finger at the other side, which is what the government wants, so they can continue to steal from us.

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And of course Boomers don’t understand the frustrations because they were young at the beginning of the cycle and able to acquire all the assets before they got too expensive.

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Don’t worry, Bitcoin fixes this, it just takes time for people to understand it and adopt it, but it’s happening. Trump is speaking at the Bitcoin conference in two weeks. You might want to start paying attention to signals. Also, the next crisis will be enormous, whatever it is. In 2008 we spent a trillion to paper over the problem. It took 6-7 trillion to paper over in 2020. These moments speed up adoption quickly, as people realize what they thought they knew, wasn’t true .

Re the second chart, the explanation isn’t borne out by the data. Cell phone service and car manufacturers (and use of a car) are arguably just as heavily regulated as our food supply, wages, and childcare.

Plus, how would BTC or even a gold standard fix govt regulations? They still carry a cost under those systems, right?

 

[BradStevens]

Re the second chart, the explanation isn’t borne out by the data. Cell phone service and car manufacturers (and use of a car) are arguably just as heavily regulated as our food supply, wages, and childcare.

Plus, how would BTC or even a gold standard fix govt regulations? They still carry a cost under those systems, right?

Also, perhaps the better link between the two groups in the second chart is that those are goods that benefit most from either or both technological advancements and cheap overseas labor and manufacturing. Those two factors don't affect the others above the line, either at all or as much.

 

[snarlcakes]

Re the second chart, the explanation isn’t borne out by the data. Cell phone service and car manufacturers (and use of a car) are arguably just as heavily regulated as our food supply, wages, and childcare.

Plus, how would BTC or even a gold standard fix govt regulations? They still carry a cost under those systems, right?

There will still be a cost for regulations. The question is how much? Do you think a government is larger and more powerful in a system where it can print the money or a sound money system where it can’t?

There’s a reason why governments run deficits, it’s because they know the people won’t vote them back into office if they increased taxes. Taxes would need to be raised immediately 30-35% to pay for our current government.

 

[BradStevens]

There will still be a cost for regulations. The question is how much? Do you think a government is larger and more powerful in a system where it can print the money or a sound money system where it can’t?

There’s a reason why governments run deficits, it’s because they know the people won’t vote them back into office if they increased taxes. Taxes would need to be raised immediately 30-35% to pay for our current government.

So is there a chart showing govt spending getting out of control after 1971?

I now realize my entire life has been lived without the gold standard.

 

[BradStevens]

So is there a chart showing govt spending getting out of control after 1971?

I now realize my entire life has been lived without the gold standard.

Also, re the first chart, it would be helpful to see the govt benefits added to the wages chart, since presumably, the wage worker is seeing greater govt benefits that, in the past, would have consumed his wages. Yes, that's forced consumption, but still, it would be useful to see.

 

[crazed_hoosier2]

Cell phone service and car manufacturers (and use of a car) are arguably just as heavily regulated as our food supply, wages, and childcare.

You’re assuming that all government regulation manifests equally - such that every regulated good/service can be compared two dimensionally with other ones by how heavily or lightly regulated we consider them to be.

I don’t think that’s reflective of reality. And this is why I encourage people, on the subject of regulation, to try to be more granular than just "we need less" or "we have too much." Not only is that so vague as to be meaningless, it discounts the reality that many regulations and regulatory frameworks are irrefutably beneficial....even, in some cases, when they're "big."

So...let's look at the use of a car as an example, since you cited that. Would anybody want to live in a society where people had cars, but few regulatory limits on their use? Even setting aside things like impaired driving and the like, just imagine what it would be like without lanes, stop lights, rules about which side of the road to drive on, speed limits, etc. etc. And, yes, those things very much are "government regulation." However, they don't limit where people can go in their vehicles -- just the rules they have to follow while getting there.

Well, I don't think the same could be said for any and all regulation -- that we can go where we want, when we want...so long as we follow all the rules of the road. That's why it's misleading to be vague about regulation, or assume equivalencies simply based on the 1 or 0 of whether or not something is regulated.

 

[crazed_hoosier2]

There’s a reason why governments run deficits, it’s because they know the people won’t vote them back into office if they increased taxes. Taxes would need to be raised immediately 30-35% to pay for our current government.

Yes. But a lot of people I come in contact with who generally hold to the idea that we can and should mostly increase taxes to match the expenditures we have (as opposed to mostly shrink expenditures to match the tax revenues we have) think that this burden can, should, and would be borne by wealthy people who are, at present, not "paying their fair share."

And most people are usually OK with taxes being raised on rich people.

The whole thing is a massive lie, though.

 

[crazed_hoosier2]

Re the second chart, the explanation isn’t borne out by the data. Cell phone service and car manufacturers (and use of a car) are arguably just as heavily regulated as our food supply, wages, and childcare.

Also, regarding that 2nd chart (which I have always considered to be an extremely revealing chart), my biggest takeaway from it is that the more government is involved in procuring and financing a good or service -- ostensibly because it's approached as a right or "freedom" in accordance with FDR's famous Four Freedoms social vision in 1941 -- the more expensive we should expect that good or service to become.

I remember when Mitch Daniels was once asked about the skyrocketing cost of higher education and how it seemed to parallel the cost trajectory of healthcare goods/services. And his answer was great, with that folksy grin and demeanor....something to the effect of "Huh, what a coincidence."

Yeah. I don't see it as a coincidence at all.

 

[BradStevens]

You’re assuming that all government regulation manifests equally - such that every regulated good/service can be compared two dimensionally with other ones by how heavily or lightly regulated we consider them to be.

I don’t think that’s reflective of reality. And this is why I encourage people, on the subject of regulation, to try to be more granular than just "we need less" or "we have too much." Not only is that so vague as to be meaningless, it discounts the reality that many regulations and regulatory frameworks are irrefutably beneficial....even, in some cases, when they're "big."

So...let's look at the use of a car as an example, since you cited that. Would anybody want to live in a society where people had cars, but few regulatory limits on their use? Even setting aside things like impaired driving and the like, just imagine what it would be like without lanes, stop lights, rules about which side of the road to drive on, speed limits, etc. etc. And, yes, those things very much are "government regulation." However, they don't limit where people can go in their vehicles -- just the rules they have to follow while getting there.

Well, I don't think the same could be said for any and all regulation -- that we can go where we want, when we want...so long as we follow all the rules of the road. That's why it's misleading to be vague about regulation, or assume equivalencies simply based on the 1 or 0 of whether or not something is regulated.

Agreed completely.

But I didn't make that assumption--the tweeter did. I was just questioning that conclusion with the very data and assumptions he used.

 

[snarlcakes]

Also, perhaps the better link between the two groups in the second chart is that those are goods that benefit most from either or both technological advancements and cheap overseas labor and manufacturing. Those two factors don't affect the others above the line, either at all or as much.

You’re correct. The prices for both should be lower. In a free market prices move to the marginal cost of a good/service. What’s the cost of a line of code? Also, the government benefited from the tailwind of a billion cheap Chinese laborers the past several decades. Of course there are trade offs (the rise of populism and Trump).

What people miss is how they measure inflation in the current system. For example If we have 10% productivity gains and 12% growth in money, the government says inflation was 2%.

 

[crazed_hoosier2]

Agreed completely.

But I didn't make that assumption--the tweeter did. I was just questioning that conclusion with the very data and assumptions he used.

OK.

I got the impression that you were making that assumption by saying that cell service was as heavily regulated as other things that haven't become more affordable over time.

 

[BradStevens]

Also, regarding that 2nd chart (which I have always considered to be an extremely revealing chart), my biggest takeaway from it is that the more government is involved in procuring and financing a good or service -- ostensibly because it's approached as a right or "freedom" in accordance with FDR's famous Four Freedoms social vision in 1941 -- the more expensive we should expect that good or service to become.

I remember when Mitch Daniels was once asked about the skyrocketing cost of higher education and how it seemed to parallel the cost trajectory of healthcare goods/services. And his answer was great, with that folksy grin and demeanor....something to the effect of "Huh, what a coincidence."

Yeah. I don't see it as a coincidence at all.

In general, true, but not universal. Economies of scale might counterbalance some of that.

Also, our power sources (electricity and gas) and water services are incredibly regulated. Have they seen the same inflation since 1971? I don't know but would guess not.

 

[snarlcakes]

Agreed completely.

But I didn't make that assumption--the tweeter did. I was just questioning that conclusion with the very data and assumptions he used.

Sorry, I should have mentioned in the beginning I just wanted to post the charts. I honestly, didn’t even read their comments. I couldn’t find the charts without comments when I looked quickly for them.

 

[crazed_hoosier2]

In general, true, but not universal. Economies of scale might counterbalance some of that.

Also, our power sources (electricity and gas) and water services are incredibly regulated. Have they seen the same inflation since 1971? I don't know but would guess not.

But what's a striking difference between gas/electric and things like healthcare and higher education? It's not the relative degrees of regulation -- but the relative degrees of subsidy (in whatever form).

I think it's fair to say that many Americans have come to view healthcare and education (along with housing, food, etc.) as de facto rights. But how much does that apply to gas/electric services? People get utilities shut off all the time. There's various forms of assistance available, but certainly not to the degree that healthcare has.

I don't think the Tweeter was discounting regulation in what he said. But I think he was mostly referring to subsidy.

 

[BradStevens]

Sorry, I should have mentioned in the beginning I just wanted to post the charts. I honestly, didn’t even read their comments. I couldn’t find the charts without comments when I looked quickly for them.

Don’t apologize. They are interesting charts. And interesting, if I think incorrect, conclusions. Good discussion here.

 

[BradStevens]

But what's a striking difference between gas/electric and things like healthcare and higher education? It's not the relative degrees of regulation -- but the relative degrees of subsidy (in whatever form).

I think it's fair to say that many Americans have come to view healthcare and education (along with housing, food, etc.) as de facto rights. But how much does that apply to gas/electric services? People get utilities shut off all the time. There's various forms of assistance available, but certainly not to the degree that healthcare has.

I don't think the Tweeter was discounting regulation in what he said. But I think he was mostly referring to subsidy.

I think the more relevant difference between the two is the amount of man power and specialized labor needed for each and how much new tech can decrease costs and increase production.

With the increasing rate of technological advances, it shouldn’t be surprising that goods produced using those advances and saving labor costs would see decreasing relative pricing.

Within healthcare, where tech is a viable replacement for specialized labor (as opposed to needing even more of it), I’m guessing prices have also come down.

 

[snarlcakes]

In general, true, but not universal. Economies of scale might counterbalance some of that.

Also, our power sources (electricity and gas) and water services are incredibly regulated. Have they seen the same inflation since 1971? I don't know but would guess not.

I don’t know, but I assume innovation has kept energy prices down. The regulations could have been just as inflationary as education, for example, but productivity has increased dramatically to keep prices somewhat under control, relatively speaking. The world and U.S. consumes more energy today than they did in 1970.

Slightly OT: Amazon bought a nuclear power plant for its cloud/ data centers. I was listening to a podcast and they were speculating what will hold back AI and etc is access to energy. The world is going to start consuming a lot more energy. Climate Change peeps aren’t going to be happy.

 

[crazed_hoosier2]

I think the more relevant difference between the two is the amount of man power and specialized labor needed for each and how much new tech can decrease costs and increase production.

With the increasing rate of technological advances, it shouldn’t be surprising that goods produced using those advances and saving labor costs would see decreasing relative pricing.

Within healthcare, where tech is a viable replacement for specialized labor (as opposed to needing even more of it), I’m guessing prices have also come down.

I'm certainly not discounting what you're saying entirely. I'm just not convinced that this explains such a striking divergence.

And, you're right, there are healthcare goods and services that have gotten cheaper over time. But aren't a lot of them elective things we pay for out of pocket? Lasik, etc.? I think it matters quite a lot when the consumer of a good or service has a direct stake in its price. But few consumers care what things cost when there's a 3rd party payer -- and certainly not to the same degree they care when they have to write a check.

 

[hoot1]

In general, true, but not universal. Economies of scale might counterbalance some of that.

Also, our power sources (electricity and gas) and water services are incredibly regulated. Have they seen the same inflation since 1971? I don't know but would guess not.

Given utilities have a virtual monopoly it is only natural that states regulate them.

State regulation authorities have the important task of balancing the interests of both utility companies and consumers. Utility costs to businesses and homeowners/renters vary greatly from state to state depending on many factors with demand being a big factor.

For the most part utility company stocks over the long run are a safe investment with a fairly good return. Add this to the discussion to illustrate utility companies under our system are treated fairly by the regulators but at the same time not using their monopoly status to gouge consumers.

 

[crazed_hoosier2]

Slightly OT: Amazon bought a nuclear power plant for its cloud/ data centers. I was listening to a podcast and they were speculating what will hold back AI and etc is access to energy. The world is going to start consuming a lot more energy. Climate Change peeps aren’t going to be happy.

They ought to be fine with it as long as the sources of energy are carbon-limited -- like Nuclear, Solar, Wind, etc.

 

[snarlcakes]

Yes. But a lot of people I come in contact with who generally hold to the idea that we can and should mostly increase taxes to match the expenditures we have (as opposed to mostly shrink expenditures to match the tax revenues we have) think that this burden can, should, and would be borne by wealthy people who are, at present, not "paying their fair share."

And most people are usually OK with taxes being raised on rich people.

The whole thing is a massive lie, though.

It’s much easier to say it than do it. The wealthy don’t have enough money. Taxes on the middle class would need to increase as well. Also, as capital moved from individuals and consumers you would see a slowing of the economy. Most likely a severe recession. Then people might start to ask themselves, how big does government need to be.

 

[IUCrazy2]

The feeling of America being in precipitous decline is an image carefully crafted by the religious right and white nationalists for almost 50 years now. It's silly.

America is as great as it has ever been.

I'll put on my scream-teamer whiny Trumpturd hat.

It's not great because gays are no longer told they are scum and need to hide, and are told that they can marry, adopt, and be themselves? The horror!

It's not great because we outlawed segregation (the driving force behind the moral majority, which was formed not out of Roe v Wade but out of rulings that Christian schools could not remain tax-exempt if they excluded blacks)? The horror!

It's not great because even the poor, homeless, etc is now allowed to vote? The horror!

It's not great because we value women and minorities in the workplace? The horror!

It's not great because we have decided to protect the environment, clear air, clean water, and a stable climate? The horror!

You "dream teamers" are dumb shit whiners.

And as a former Republican you voted for all of that. You must be a real misogynistic, homophobic, racist asshole to have knowingly voted for all of that until Trump came along. What a dick you must be.

[Shorter and less caustic me, what a bunch of crap your post was.]