When kids turn 18, they should be told about the real birds and bees:
1) Banks are run by extortionists. If you can't afford something, don't buy it, get over it. And if your self-image depends on some huge car or branded shoes, etc... just resist. Read some Epictetus.
2) Convenience often means being indentured to a company. Resist.
Credit availability has been used as a lever to mask market distortions for over a century. The unintended consequence of credit availability expansion has been the necessity of debt use to achieve “middle class” milestones for nearly 50 years.
The West has distorted housing construction markets with such onerous regulations and taxes that it is reaching the limit of what credit availability can be stretched to. It’s even contributing to the suppression of total fertility rates.
We need to cure the disease of market distortions before we reach the cliff. Restore property rights.
A society built on debt quietly depends on something fragile: trust that sacrifice today will still mean something tomorrow. I wrote an essay recently about deferred reward and the psychological consequences when that trust begins to break down.
"The Making of the Indebted Man" by Maurizio Lazzarato is an excellent treatment of this core issue, drawing from a background in economics and philosophy. I recommend it.
“The U.S. federal government collected $2.66 trillion in individual income taxes in Fiscal Year (FY) 2025. Combined with other revenue streams—such as corporate income taxes and social insurance—the Internal Revenue Service (IRS) brought in approximately $5.2 trillion in total tax revenue for the year.”
From safari search just now. So, confirming the failure. Who pays more and benefits less? And glass half full can be the frame too, if wished - same outcome.
The USA spends (if keeping up with commitments) @ 20% of the taxes paid by majority Americans to cover our deficit (national debt).
The Executive Branch and Congress will never deal with the National Debt. The only way, as a nation, that we will deal with it is: Inflation. Example; Say an insurance company (the Great Recession proved how stupid the industry is) in 1996 bought a 30 year Treasury Bond. The purchasing power that the money that the company just received has dropped by about 50%. That's how America will deal with the National Debt: Pay it off with less valuable dollars.
Now the Deficit appears to be something different, as you pointed out. The US takes in about $5 T in taxes and spends $7 T. Now it looks like, since the interest is $ 1 T, we have to make choices. No! Congress will simply issue more debt to cover an ever increasing amunt of debt service. And then inflation is inevitable. As Ben Bernanke pinted out, if you fly a helicopter over a (stable) economy, you will get inflation. And the Fed can only deal with relatively short term inflation/ recession economic conditions, not long term fiscal recklessness. The Taylor Rule is correct. So if you don't like a 10 year Treasury at 4.6%, get used to it. Deficits produce inlation without any doubt. Why would anybody buy a long term bond, and if not how will America sustain itself?
Reconsider health field (in a good way). I would think data shows promise in advanced nursing degrees if 20 year old is up for it. Her plan otherwise sound sound. Build up some equity while living with you. Your advice helps her prevent digging a hole that won't be any fun. She can have fun without going into dent and building financial security.
Nothing new, debt makes the world go round...
When kids turn 18, they should be told about the real birds and bees:
1) Banks are run by extortionists. If you can't afford something, don't buy it, get over it. And if your self-image depends on some huge car or branded shoes, etc... just resist. Read some Epictetus.
2) Convenience often means being indentured to a company. Resist.
Credit availability has been used as a lever to mask market distortions for over a century. The unintended consequence of credit availability expansion has been the necessity of debt use to achieve “middle class” milestones for nearly 50 years.
The West has distorted housing construction markets with such onerous regulations and taxes that it is reaching the limit of what credit availability can be stretched to. It’s even contributing to the suppression of total fertility rates.
We need to cure the disease of market distortions before we reach the cliff. Restore property rights.
A society built on debt quietly depends on something fragile: trust that sacrifice today will still mean something tomorrow. I wrote an essay recently about deferred reward and the psychological consequences when that trust begins to break down.
https://megfloss.substack.com/p/the-second-marshmallow?r=3vtvi&utm_medium=ios
Speaking of debt, is anyone outraged about this $1.7 billion fund settlement - Why are we all still asleep?
"The Making of the Indebted Man" by Maurizio Lazzarato is an excellent treatment of this core issue, drawing from a background in economics and philosophy. I recommend it.
https://monoskop.org/images/6/62/Lazzarato_Maurizio_The_Making_of_the_Indebted_Man_An_Essay_on_the_Neoliberal_Condition_2012.pdf
Sobering stuff around debt
Yeah, duh
“The U.S. federal government collected $2.66 trillion in individual income taxes in Fiscal Year (FY) 2025. Combined with other revenue streams—such as corporate income taxes and social insurance—the Internal Revenue Service (IRS) brought in approximately $5.2 trillion in total tax revenue for the year.”
From safari search just now. So, confirming the failure. Who pays more and benefits less? And glass half full can be the frame too, if wished - same outcome.
The USA spends (if keeping up with commitments) @ 20% of the taxes paid by majority Americans to cover our deficit (national debt).
The Executive Branch and Congress will never deal with the National Debt. The only way, as a nation, that we will deal with it is: Inflation. Example; Say an insurance company (the Great Recession proved how stupid the industry is) in 1996 bought a 30 year Treasury Bond. The purchasing power that the money that the company just received has dropped by about 50%. That's how America will deal with the National Debt: Pay it off with less valuable dollars.
Now the Deficit appears to be something different, as you pointed out. The US takes in about $5 T in taxes and spends $7 T. Now it looks like, since the interest is $ 1 T, we have to make choices. No! Congress will simply issue more debt to cover an ever increasing amunt of debt service. And then inflation is inevitable. As Ben Bernanke pinted out, if you fly a helicopter over a (stable) economy, you will get inflation. And the Fed can only deal with relatively short term inflation/ recession economic conditions, not long term fiscal recklessness. The Taylor Rule is correct. So if you don't like a 10 year Treasury at 4.6%, get used to it. Deficits produce inlation without any doubt. Why would anybody buy a long term bond, and if not how will America sustain itself?
Always learning something from you, Scott. thank you
Love your stuff scott. Thanks for all the effort.
Reconsider health field (in a good way). I would think data shows promise in advanced nursing degrees if 20 year old is up for it. Her plan otherwise sound sound. Build up some equity while living with you. Your advice helps her prevent digging a hole that won't be any fun. She can have fun without going into dent and building financial security.