Crisis averted.
The US has raised its debt ceiling by some four trillion dollars so that it can borrow some more money to pay off the repayments for the money they previously borrowed, to pay off the obligations for the money they had borrowed earlier. Now, that this is covered for the time being, they can go and spend more using debt from the future until 2025, when they can borrow more to pay off this borrowing, and the borrowing from earlier.
What a robust, healthy economy,
I get the difficulty though, as after all, I struggle at times to make ends meet too. As do probably most of us in this world. A national economy is complex and the US economy is the largest in the world. Managing economies are a bit like flying long distances, a degree off in the wrong direction at the start, means never reaching the final destination - and along the way, there are all sorts of obstacles that need to be negotiated, with each pull on the lever being a bit off too.
Everyone was packed for the beach, but ended up crashing into a snow-covered mountain.
And, the levers only control part of the plane, with other forces at play trying to take it in another direction to a place they want to go. Fiscal policy is built on mechanisms that are increasingly less suitable to deal with the economic world, because they can only affect what they have access to. A global economy filled with corporate conglomerates using tricky accounting to ensure that they never pay their full tax obligation anywhere in the world, means that while profits are high for investors, large amounts are being taken from citizens and pushed into financial black holes and used in investment mechanisms that increase gaps between the wealthy and the poor.
But, the governments aren't too concerned about closing all of these loop holes, as after all, they are incentivized to keep them open by the corporations, and their own returns for their interest groups, investor friends, and personal portfolios. Balancing the books is the last thing they really care about, because their main goal is to get reelected to keep the con running a bit longer, before being ousted by a group who will promise to drain the swamp, and then filling it with their own brand of sludge.
Rinse and repeat.
At some point, I guess we will wake up to the conclusion that trying to control an increasingly complex system from a centralized point is always going to fail, as the core can never have perfect enough information to ensure that the right resources, are in the right places, at the right time. This is partially due to basic logistical issues, but mostly due to the fact that humans are bloody poor at this kind of complexity, not to mention, selfish, greedy and competitive. While we are designed to be cooperative, collaborative and social, we don't scale.
Centralization is like having a hundred people wanting to see a movie, but having to decide on which one to go to out of a choice of ten. A centralized authority can make the decision, but only some people will get what they want, with the majority forced to watch what they would rather not. If there are ten cinemas however, then the movies have to compete against each other for the attention of individuals and those that no one wants to go to, will have empty theaters. This is fine for films and their respective production companies, because there are many of them and the failure of one company, isn't the failure of the entire industry - but this isn't suitable for economies that will affect everyone within its bounds, and its bounds are everyone.
This is a big part of the reason that decentralized governance and economies are the future, because they are able to meet local needs, and compete in financial tribes in a way that will protect them from centralization, because monopolization is much harder. This is because if any one gets "too big and abusive" the consumer group will adjust to use others instead. Currently, people are forced into using the consolidated offerings, because they are dictated by the central authority.
Too big to fail.
This is often posited as a type of hubris, where an organization or institution is considered so powerful, it can't fail. But, it is more that it is so big that it isn't allowed to fail, because if it does, it is going to have massive repercussions for the rest of the economy, so it can be poorly managed and still be given protection. The US economy is much like this, where no matter how poorly it behaves, it is continually forgiven because to not do so, will see a global financial tantrum. And, the more it is protected, the bigger dick it becomes, like a spoilt child who feels it is entitled to whatever it wants, that grows into an asshole adult.
No, it isn't easy to manage a large economy, but this is also why it is folly to even try to do it from a centralized position, because it isn't centralized. There is a free market of operators in the system that are constantly trying to maximize themselves, but the majority of the participants are beholden to the centralized authority that pretends it has control of it all. It doesn't, but through a process of smoke, mirrors and the threat of incarceration - we are prisoners.
The comforting fact however is that all centralized structures fail, all of them. Every single one of them in the past has collapsed and into the future, they are going to collapse too. But, this isn't exactly cause for celebration because the collapse is a lot like the sun dying, the rest of what we know dies with it too. However, life is persistent and small pockets can find a way to survive and start again.
It would be far better for all involved if rather than pushing a centralized economy to the point of collapse, we instead found healthier ways to organize ourselves so that we are able to better suit our needs as a global society. The problem goes back to us being selfish, greedy and competitive however, with incentives that reward bad behavior, over improved wellbeing.
There will be another crisis. And another. And another.
The question is, is the ceiling raising, or is the hole getting deeper?
Taraz
[ Gen1: Hive ]
