Yes.

* The US is able to get very cheap loans, which enables the US to throw around money when necessary to do things that are important (emergency projects, economic stabilization, etc).

* The US has an extraordinary power to influence global politics due to their ability to control trade and banking systems.

* The US dollar is stable in part because of its status as a trade currency. And a stable currency is extremely important for citizens of a country.

> Because it enables us to run unsustainable deficits?

No, it it actually the primary reason that enables the US to run huge deficits sustainably. The currency is important enough to the world that giving a loan to the US is safer than giving one to another country whose currency is not as important.

But that sounds bad! Why should we be borrowing all this money from foreigners when we’re a rich country? What if I want the U.S. to build stuff, instead of moving money around and trying to “influence global politics.”

I’d also love a sane domestic politics that acknowledges that borrowing money from foreigners every year because we can’t square our spending with our taxing is a bad thing.

Indeed, there are disadvantages to being the world's reserve currency. This is known as the Tiffin Dilemma and was articulated in 60's:

https://en.m.wikipedia.org/wiki/Triffin_dilemma

Basically this is why times have been great for industries like finance and tech in the US, but sucked for manufacturing. In turn leading to wealth inequality and, dare we say the class struggle that seem to have reached a boiling point.

> Why should we be borrowing all this money from foreigners when we’re a rich country?

The crazy thing is, most of the money that the US borrows from is from their own citizens... not foreigners.

I don't know why everyone presumes that US debt is mostly or entirely owed to other countries. It isn't.

Why doesn't the US just print money instead of having to borrow money then print it?

does any other country do it this way?

Taking out a loan and promising to repay it is a voluntary exchange of value that markets are comfortable with -- to issue debt is to play by the rules. Printing money directly is just an exercise in pissing on the users of that currency. People don't want to use currencies that do that. When people buy US debt, they are implicitly validating their trust in the currency to be paid back later.

Some other countries have simply tried to print their way out of deficits, usually it doesn't end well. Zimbabwe is my favorite example. https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

It is related to the general definition of inflation.

Those with existing assets (including retired folks in the US) theoretically "lose" in this situation.

You can split the US and see inequality arise from printing: (1) US federal govt vs non-govt entities (2) US citizens with assets vs US citizens without assets, (4) people who received money first vs people who last bits of the "trickle down".

In various cases, certain people "win" and others "lose"

So the current system of loans/ bonds generally benefits the rich (or people with assests)?

Because "borrowing" money 1.) recycles foreign dollars back into the US economy 2.) maintains foreign interest in accepting US dollars for goods and thus sustains US trade deficit 3.) prevents idle foreign US dollars that would other wise buying US assets that then inflates their price (eg real estate)

Okay, but then doesn’t that undermine your point about the importance of the US being the world’s reserve currency? What does that matter if most of our debt is to ourselves anyway?

Japan runs huge structural deficits and most is held by its own citizens.

Reserve currencies are important for international trade, not just international loans.

Being a reserve currency increases currency stability.

Being stable makes the cost of all loans, including domestic loans, cheaper.

Being stable also increases the use of a currency for reserve purposes.

the american standard of living would collapse if america could not run deficits. in the very long term, like in 50 years, it might actually be better for america, but this generation of americans would be hurt big time.

Why? How? The US balanced the budget under Clinton. I was pretty young, but I don't remember the standard of living collapsing in the early 90s (quite the opposite in fact).

for a few years only, and with tiny surpluses compared to deficits that came before and after. and the deficits exploded again.

I can hold my breath for a few seconds, but not for a 10 minutes. it is like that.

and that is only the federal deficit. local governments are also running massive deficits.

I mean, the CBO has a range of policies for fixing the federal deficit, most of which are pretty reasonable. I'm a fan of taxing the better off more (but I'm not a US citizen or taxpayer so that's easy for me to say).

Define "the better off?" I also agree with you in principle, but you're overlooking an important fact about American politics. The mainstream "left" in the U.S. is dominated by affluent professionals who hate paying taxes as much as any Reagan Republican. They pay lip service to the idea of "taxing the better off more," but by that they mean "billionaires." That's not a big enough tax base to raise the $1-2 trillion we would need to fix the deficit.

That's why you get a ridiculous situation where even the center-left party is promising not to raise taxes on people making under $400k/year. In reality, such a tax plan wouldn't even meaningfully raise taxes on people making $1 million a year. You can't solve the deficit by raising taxes if you're unwilling to tax 99.5% of the population.

How much smaller would the US deficit be if America wasn't invading multiple countries at the same time?

Taxes are only one side of this problem. The other side is expenses. Empires are expensive.

Which countries are we currently invading? Regardless, in the 2023 budget Social security far outstrips defense, Medicare is just a shade higher, and Medicaid is not far behind. I'm entirely in favor of slimming down the US military industrial complex, but doing so isn't going to fix the deficit. You could 0 out the defense budget entirely and there would still be another trillion dollars of deficit to deal with.

Just listing the ones from my short life so far: Afganistan, Iraq, Syria, Libya, Palestine & Lebanon (indirectly through massive support to Israel). I'm sure I missed a few since there are so many.

This is entirely correct. I've disagreed with you a bunch over the last few months but this is unfortunately true.

I do think that, at least, removing the income cap on social security would be helpful.

Honestly though, the only thing that'll stop the current US approach to fiscal policy is the bond markets.

Being able to trade arbitrarily-devaluable IOUs from a future America for real goods today is a fantastic deal. Putting it in the kid terms that seem to be necessary for this dynamic of endless "questioning" - if little Bobby can get ice cream cones from the store by giving them pieces of paper with his picture on them, that's pretty awesome for little Bobby.

In the bigger picture - yes the reserve currency dynamic has allowed many things to grow too detached from reality, and those things are in dire need of reform (eg the everything bubble). But that the destroy-America-first platform can include condemning the whole dynamic is itself just another symptom of that detachment and entitlement. Talk about wanting to kill the goose that lays golden eggs because you don't understand it, and don't want to spend any effort trying to understand it.

> In the bigger picture - the reserve currency dynamic has allowed many things to grow detached from reality, and those things are in dire need of reform (eg the everything bubble)

It seems like you don’t even disagree about the problem, you just think we should chip away at the symptoms instead of getting at root causes.

Free ice cream is bad! Bobby is going to not learn how to work for a living, and he’s going to get diabetes on top of that.

The root causes are stability and general wealth. Working to "fix" those is abjectly retarded.

If letting our industrial base wither is a problem, then spend some of the resources we get for merely exporting our currency on explicitly building it back up. Those IOU's can be traded for machine tools just as easily as disposable "fast fashion".

If the all-asset bubble is a problem, then stop letting the Federal Reserve drop interest rates to the point that wild or highly-leveraged speculation makes sense.

If the churn of cheap non-repairable throwaway crap is a problem, then ban it and/or mandate repairability outright.

If the proliferation of do-nothing middle managers in government/academic/industry is a problem, then figure out how to increase accountability, actual meritocracy, and general nimbleness. Turning the financial and authoritarian screws mostly hurts people who are focused on doing their jobs rather than focused on keeping them.

Humans are not wild animals. Free ice cream is an unequivocally good thing - it can always not be eaten. If little Bobby is eating unhealthy amounts of ice cream, then his parents should stop him from doing that independent of financial constraints.

If little Bobby is not developing a work ethic, then teach him to work hard directly and teach him how to save his money for larger goals. Certainly don't think that teaching him to live hand to mouth for ice cream treats is doing him some kind of service.

These are all problems of abundance. The destructionist movement seems to be based on wanting to revert to some idyllic version of the past with a struggle we understood. Whereas we really need to be solving the new problems we face.

As it stands, the destructionist approach is going to leave us without financial wealth or industrial wealth. Tariffs and allowing increased corporate externalities are basically the economic equivalent of "thoughts and prayers" .