re: "I view the deficit as a problem for the political system, leading to friction and strife."
The problem is they don't see enough negative consequences and therefore they don't solve the problem, they merely keep kicking the can down the road. Thomas Jefferson warned of this in a letter to James Madison decrying the idea of national debt that could be passed down to future generations, obligations passed without their consent:
"Then no man can, by natural right, oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might, during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be the reverse of our principle."
Unfunded liabilities are a can they keep kicking down the road, and like Jefferson referred to, they are an obligation being imposed on future generations since they can get away with it. As this page points out, the US Debt clock indicates the total US assets are barely above estimates of unfunded liabilities:
If nothing changes, that will all be added to the debt over time. When you add the existing national debt, the country as a whole is in the red. In essence future generations being born now are "Born In Debt" with their share. Politics is often about "the children", and although some have tried to make the about "intergenerational warfare " before and hadn't succeeded yet: but that doesn't mean that argument can't. While many of us are skeptical of Greta Thunberg's concerns when she said "How dare you !": the concern for children resonated politically, and so that site suggests asking "how dare you!" but future generations in debt without their consent, that it needs to be fixed.
Once again, Kling drops another nesting-doll of an essay (about other essays) that will leaving me reading all day. If he were a milkman, he’d leave the cow!
You weren't pessimistic enough in 2010. In 2012 the CBO believed that the public debt would be between 15 and 16 trillion dollars at the end of 2022 rather than the $24.3 trillion it turned out to be. They are now projecting it will be $46.5 trillion in 2033, so I am guessing the real number will be in the neighborhood of $60 trillion.
I remember reading those essays when they came out. Solid work then, and still applicable now. Well done!
I think your bushel of wheat metaphor in the budget example is particularly apt. A person can only eat so much wheat, so so long as times are overall good and everyone has enough to eat and some to spare, it doesn't matter so much who gets shafted more or less on the lending deal. People aren't happy to get shafted, but it doesn't feel critical. When things get tight, say with 2% growth called "robust" and high inflation, things likely seem a lot tighter, and the debate over who gets what starts to get a lot more pointed.
The Overreation Syndrome is outstanding in its explanation of trade-offs between the two errors: false positive, and false negative. Much of the AS Kling written work includes those ideas, but this brief note excellently explains the theory with relevant examples.
Very important is that for most modern systems, reducing false positives does actually lead to more more false negative errors. And usually even more.
The idea that better information might reduce both errors is more theoretical, as shown by example:
"For example, rather than provide universal aid for community college, policymakers could try to identify the characteristics of students who are likely to benefit from such aid. A statistical analysis of past performance might show whether grades in high school, standardized test scores, or other information are more useful in predicting long-term success from attending community college."
Such SAT type scores, which do predict performance, show some minorities having lower scores, and predicts that they will do worse. Such predictions seem to be true - and are called racist. Tho in the case of car accidents happening more often to males, so that they should pay higher insurance, such sexism seems acceptable since it hurts males.
The Truth, Reality, is racist, sexist, and in suicide statistics, homophobic - since homosexuals commit suicide at a higher rate, as do trans folk. Those on the wrong side of these group averages can consider themselves oppressed by reality - which makes them oppressed. So they talk in the language of oppression by oppressors. The Three Languages of Politics covers that language well, but it's sad that the oppression by reality is mostly misdirected against Christian Capitalism - the West.
re: "Today’s short news cycle tends to steer people away from thinking carefully about trade-offs."
Yup, that's true regarding the tradeoffs, and basically examining fundamental issues. Neil Postman's book on Amusing Ourselves to Death: Public Discourse in the Age of Television has been magnified in the age of the internet and cable and twitter where we can be constantly distracted by new superficial issues.
That likely happened during the covid crisis, where in the heat of the moment people gave in to political expediency. We still haven't as a society done a post mortem on the tradeoffs involved in policies, and this page suggest its likely they didn't do tradeoffs at the time and we should hold them accountable for that:
"According to the WHO, COVID has caused almost 7 million deaths worldwide. To put this in perspective, the BBC reported on April 21, 2020 that the world risked ‘biblical’ famines due to the pandemic, according to the UN. The head of the UN’s World Food Programme said that he feared that 30 million people, or more, could die in a matter of months if the UN did not secure more funding and food. The actual numbers may have turned out differently, but there were voices raising concerns over potential vast global negative consequences early in the pandemic when decisions were being made.
Unfortunately, the language used to discuss such things often attributed them to the ‘pandemic’ rather than making the crucial distinction that they were mainly due to the ‘pandemic response’. The response chosen by governments may have cost more lives than it saved already, not to mention the risk of indirectly costing even more lives over the next few decades due to unintended consequences that were not publicly debated.
Were the right choices indeed made based on what was known at the time, and of course how many did die due to the pandemic response and was there a different way to handle it?"
In an age when we expect constant innovation in tech, we haven't innovated in the basic political structures of our country in hundreds of years. There are basic flaws in our democracy like the we have minority rule when a governor can be elected with a 35% plurality (https://IllusionOfConsent.com ) and the reality that as John Stuart Mill pointed out, our system can lead to minority rule without proportional representation. A variant of that due to the way primaries lead to extreme candidates that win since their party wins in a safe district so the extreme minority drives the agenda and likely helps drive polarization,
As you say, GDP growth means Lois and Sammy are disappointed a little bit less, maybe not at all.
I liked the concise and simple way you said "GDP growth in excess of the interest rate" until I realized it was wrong. It also depends on the size of the debt. It should be GDP growth in excess of the total interest paid as a percent of GDP.
re: "I view the deficit as a problem for the political system, leading to friction and strife."
The problem is they don't see enough negative consequences and therefore they don't solve the problem, they merely keep kicking the can down the road. Thomas Jefferson warned of this in a letter to James Madison decrying the idea of national debt that could be passed down to future generations, obligations passed without their consent:
https://web.archive.org/web/20010226092602/http://press-pubs.uchicago.edu/founders/documents/v1ch2s23.html
"Then no man can, by natural right, oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might, during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be the reverse of our principle."
Unfunded liabilities are a can they keep kicking down the road, and like Jefferson referred to, they are an obligation being imposed on future generations since they can get away with it. As this page points out, the US Debt clock indicates the total US assets are barely above estimates of unfunded liabilities:
https://BornInDebt.com
If nothing changes, that will all be added to the debt over time. When you add the existing national debt, the country as a whole is in the red. In essence future generations being born now are "Born In Debt" with their share. Politics is often about "the children", and although some have tried to make the about "intergenerational warfare " before and hadn't succeeded yet: but that doesn't mean that argument can't. While many of us are skeptical of Greta Thunberg's concerns when she said "How dare you !": the concern for children resonated politically, and so that site suggests asking "how dare you!" but future generations in debt without their consent, that it needs to be fixed.
Once again, Kling drops another nesting-doll of an essay (about other essays) that will leaving me reading all day. If he were a milkman, he’d leave the cow!
You weren't pessimistic enough in 2010. In 2012 the CBO believed that the public debt would be between 15 and 16 trillion dollars at the end of 2022 rather than the $24.3 trillion it turned out to be. They are now projecting it will be $46.5 trillion in 2033, so I am guessing the real number will be in the neighborhood of $60 trillion.
I remember reading those essays when they came out. Solid work then, and still applicable now. Well done!
I think your bushel of wheat metaphor in the budget example is particularly apt. A person can only eat so much wheat, so so long as times are overall good and everyone has enough to eat and some to spare, it doesn't matter so much who gets shafted more or less on the lending deal. People aren't happy to get shafted, but it doesn't feel critical. When things get tight, say with 2% growth called "robust" and high inflation, things likely seem a lot tighter, and the debate over who gets what starts to get a lot more pointed.
The Overreation Syndrome is outstanding in its explanation of trade-offs between the two errors: false positive, and false negative. Much of the AS Kling written work includes those ideas, but this brief note excellently explains the theory with relevant examples.
Very important is that for most modern systems, reducing false positives does actually lead to more more false negative errors. And usually even more.
The idea that better information might reduce both errors is more theoretical, as shown by example:
"For example, rather than provide universal aid for community college, policymakers could try to identify the characteristics of students who are likely to benefit from such aid. A statistical analysis of past performance might show whether grades in high school, standardized test scores, or other information are more useful in predicting long-term success from attending community college."
Such SAT type scores, which do predict performance, show some minorities having lower scores, and predicts that they will do worse. Such predictions seem to be true - and are called racist. Tho in the case of car accidents happening more often to males, so that they should pay higher insurance, such sexism seems acceptable since it hurts males.
The Truth, Reality, is racist, sexist, and in suicide statistics, homophobic - since homosexuals commit suicide at a higher rate, as do trans folk. Those on the wrong side of these group averages can consider themselves oppressed by reality - which makes them oppressed. So they talk in the language of oppression by oppressors. The Three Languages of Politics covers that language well, but it's sad that the oppression by reality is mostly misdirected against Christian Capitalism - the West.
re: "Today’s short news cycle tends to steer people away from thinking carefully about trade-offs."
Yup, that's true regarding the tradeoffs, and basically examining fundamental issues. Neil Postman's book on Amusing Ourselves to Death: Public Discourse in the Age of Television has been magnified in the age of the internet and cable and twitter where we can be constantly distracted by new superficial issues.
That likely happened during the covid crisis, where in the heat of the moment people gave in to political expediency. We still haven't as a society done a post mortem on the tradeoffs involved in policies, and this page suggest its likely they didn't do tradeoffs at the time and we should hold them accountable for that:
https://evolvingtheories.substack.com/p/illusion-of-competence-covid-response
"According to the WHO, COVID has caused almost 7 million deaths worldwide. To put this in perspective, the BBC reported on April 21, 2020 that the world risked ‘biblical’ famines due to the pandemic, according to the UN. The head of the UN’s World Food Programme said that he feared that 30 million people, or more, could die in a matter of months if the UN did not secure more funding and food. The actual numbers may have turned out differently, but there were voices raising concerns over potential vast global negative consequences early in the pandemic when decisions were being made.
Unfortunately, the language used to discuss such things often attributed them to the ‘pandemic’ rather than making the crucial distinction that they were mainly due to the ‘pandemic response’. The response chosen by governments may have cost more lives than it saved already, not to mention the risk of indirectly costing even more lives over the next few decades due to unintended consequences that were not publicly debated.
Were the right choices indeed made based on what was known at the time, and of course how many did die due to the pandemic response and was there a different way to handle it?"
In an age when we expect constant innovation in tech, we haven't innovated in the basic political structures of our country in hundreds of years. There are basic flaws in our democracy like the we have minority rule when a governor can be elected with a 35% plurality (https://IllusionOfConsent.com ) and the reality that as John Stuart Mill pointed out, our system can lead to minority rule without proportional representation. A variant of that due to the way primaries lead to extreme candidates that win since their party wins in a safe district so the extreme minority drives the agenda and likely helps drive polarization,
https://TheBigIllusion.com
and it begins with a quote from Neil Postman's book.
As you say, GDP growth means Lois and Sammy are disappointed a little bit less, maybe not at all.
I liked the concise and simple way you said "GDP growth in excess of the interest rate" until I realized it was wrong. It also depends on the size of the debt. It should be GDP growth in excess of the total interest paid as a percent of GDP.