Will Trumpism bankrupt the USA?

[dimreepr]

He's kinda the antichrist of Capitalism, which disturbingly, for a MAGA, is kinda Marxist. 

Discuss. 

Bing Videos

[swansont]

2 hours ago, dimreepr said:

He's kinda the antichrist of Capitalism, which disturbingly, for a MAGA, is kinda Marxist. 

Discuss. 

!

Moderator Note

You first. This is way too vague, and just pot-stirring.

Define what “bankrupt the US” means, and “the antichrist of Capitalism”

 

[dimreepr]

Well first and foremost, capitalism seeks globalisation and Trumpism seeks islandisation (contraction).

Perhaps that's why he's a failed booky.

 

 

[Ten oz]

Recessions are good for people with the money to buy. During recessions the Federal Reserve lowers interest rates to encourage spending. Low rates enable people to make enormous purchases and refinance existing debts. 

I think the public tends to mistakenly assume everyone benefits equally from the same set of economic conditions. That isn't the case. A recession would be welcomed by Musk, Theil, Andressen, Bezos, Zuckerberg, Trump, etc. 

[Sensei]

12 minutes ago, Ten oz said:

A recession would be welcomed by Musk, Theil, Andressen, Bezos, Zuckerberg, Trump, etc. 

..as long as they had time to sell their assets at the price top..

In principle, I disagree with you. Recession means that people stop buying, especially the things they sell are not necessary for ordinary people to survive - expensive hotels, unnecessary junk imported from china, luxury brands of the best “fashion dictators”, or the nth car, these are things that are not bought when there is a recession..

When there is a recession it is their businesses that suffer from lack of customers, lack of money, lack of liquidity, etc.

Musk has a huge problem. Because of his gesture and/or participation in politics and/or his general mental breakdown, people stopped buying his car.

https://time.com/7266929/heres-how-teslas-sales-have-been-hit-around-the-world/

"Looking at Germany, the largest market for EVs in the E.U., the country saw a 30% year-over-year rise in electric vehicle sales in February, but Tesla sales were down more than 70% compared to last year—less than 1,500 new Teslas were registered in the country in February. "

Look at Madoff - his business was going well until the recession started.. everyone who had money with him demanded returns and the pyramid collapsed..

 

 

[swansont]

23 hours ago, dimreepr said:

Well first and foremost, capitalism seeks globalisation and Trumpism seeks islandisation (contraction).

Perhaps that's why he's a failed booky.

I don’t think he seeks isolation; I don’t think he understands commerce enough to know the implications of his actions (he bankrupted a casino, for crying out loud, among numerous other failed business ventures). He hasn’t demonstrated he knows how tariffs work and he’s a bully, a would-be mafioso, so he thinks shake-downs are how things work, because that’s what he knows.

He inherited a good economy from Obama and there were enough adults in the room to keep him from crashing the economy until COVID hit, and he thinks it was his doing. Now he’s wrecking it and he and his minions are trying to blame it on Biden. Bad things are never his fault.

If the US ceases to be a stable economic partner other countries will avoid doing business here, and a certain amount of US prosperity will be lost if we aren’t considered a good risk for e.g. lending money to us, and people stop buying those things we still export. But that’s probably too much nuance for him. He might be able to bully one country here and there, but with a bunch of them aligned in opposition, he lacks the leverage he imagines he has.

22 hours ago, Ten oz said:

Recessions are good for people with the money to buy. During recessions the Federal Reserve lowers interest rates to encourage spending. Low rates enable people to make enormous purchases and refinance existing debts. 

I think the public tends to mistakenly assume everyone benefits equally from the same set of economic conditions. That isn't the case. A recession would be welcomed by Musk, Theil, Andressen, Bezos, Zuckerberg, Trump, etc. 

A lot of rich avoid taxes by borrowing against their wealth. The interest paid is much lower than the capital gains you might pay on the appreciated wealth. Those unrealized gains get zeroed out when that wealth is passed on to the next generation. “invest, borrow, die”

But if the assets lose value, then the loans aren’t covered, the banks call the loans and the whole house of cards comes tumbling down. Which is why protesting/boycotting Tesla is a current strategy to attack Musk. Much of what he‘s done is based on Tesla’s valuation. If sales crater then eventually so does the stock. If he has to sell billions in stock to cover the loans he could owe cap gains on top if it, and it drives the stock price down even more. Pissing off the world is a bad move for him.

[iNow]

12 hours ago, Sensei said:

In principle, I disagree with you. Recession means that people stop buying

You’re not wrong that purchasing behavior goes down and the recession self-reinforces thus harming the margins on those businesses and thus their owners, but Ten Oz’ point was different. 

When markets crash, it’s like a lightning sale on investments and other business. Blue chip stocks and companies that were previously too expensive to buy in bulk are suddenly available for pennies on the dollar since everyone is selling trying to get out of the market.

That’s when the big players and whales with enormous reserves come in and scoop them up and when the market inevitably recovers they’re suddenly 10x wealthier than before. Warren Buffett has preached this gospel for years. The best time to buy is when everyone else is panicking and selling… if you can, that is… most people are just tying to find a way to buy dinner and keep the water turned on.

For the Uber wealthy, though? Even though quarterly earnings will temporarily be down at Tesla and related companies, you can bet your ass Elon has sufficient reserves to still go on a buying spree during a bad quarter at one of his 7 companies. After all, he ate an almost $20B loss on twitter. He’s working on a different playing board than the rest of us. 

*there is a risk that since he used Tesla stock as collateral to finance the twitter buy his creditors could call that in if Tesla stock keeps tanking. Should’ve acknowledged that above 

[John Cuthber]

Trump should read a book called "False Economy" by Alan Beattie  (Or get someone to read it to him).
Google's AI summary says "

• Argentina's Decline:

  The book contrasts the economic trajectories of Argentina and the United States, arguing that while both nations had similar prospects a century ago, Argentina's choices led to economic decline, ultimately resulting in a serial bankrupt nation.
• Factors Contributing to Argentina's Downfall:

  Beattie identifies several factors that contributed to Argentina's economic woes, including:

  • Protectionist Policies: Argentina's embrace of protectionism, including arbitrary decision-making from policymakers, is highlighted as a key factor in its economic struggles.
  • Reliance on Autocracy: The book criticizes Argentina's reliance on the wisdom of autocrats and its disregard for the strengths of the individual.
  • Peronism: The author views Peronism as a failure, highlighting its negative impact on Argentina's economic development.
• Lessons from Argentina:

  The case of Argentina serves as a cautionary tale, demonstrating how poor economic choices and political decisions can lead to economic instability and decline.
• The book also examines other economic topics, including:

  • The importance of trade
  • The potential burdens of natural resources if not managed wisely
  • The negative influence of religion on an economy
  • The role of trade routes, infrastructure, and corruption "
    
    
    And, having read the book, I can confirm the AI is accurate enough.
    
    
    Trump seems to be taking the US down the path which crippled Argentina a hundred years or so ago.

[dimreepr]

23 hours ago, Ten oz said:

Recessions are good for people with the money to buy. During recessions the Federal Reserve lowers interest rates to encourage spending. Low rates enable people to make enormous purchases and refinance existing debts. 

I think the public tends to mistakenly assume everyone benefits equally from the same set of economic conditions. That isn't the case. A recession would be welcomed by Musk, Theil, Andressen, Bezos, Zuckerberg, Trump, etc. 

Isn't that the very definition of the capitalist end game?

Even Henry Ford, a famous Nazi, thought it was a better idea to pay the work's twice the going rate...

[Ten oz]

On 3/13/2025 at 9:17 AM, Sensei said:

as long as they had time to sell their assets at the price top

As the largest asset holders (top 1% owns 50% of the entire market) they have the greatest influence over the price. 

On 3/13/2025 at 9:17 AM, Sensei said:

Recession means that people stop buying, especially the things they sell are not necessary for ordinary people to survive - expensive hotels, unnecessary junk imported from china, luxury brands of the best “fashion dictators”, or the nth car, these are things that are not bought when there is a recession

This presumes selling is always the objective. Sometimes businesses look to reposition themselves long-term. They want mergers & acquisitions, layoffs, relocate facilities, etc. What is best through a 10yr period isn't always to maximize sells today. 

On 3/13/2025 at 9:17 AM, Sensei said:

Musk has a huge problem. Because of his gesture and/or participation in politics and/or his general mental breakdown, people stopped buying his car.

Selling Tesla's may not be part of Musk's 10yrs vision. Starlink, Space X, Twitter, and yet to be made/publicized investments might matter more to Musk. We don't know yet. Whatever Musk wants out of this endeavor hasn't been formally made clear yet. I suspect Musk gutting USAID and the The Dept of Education isn't actually important to Musk one way or the other. 

19 hours ago, swansont said:

But if the assets lose value, then the loans aren’t covered, the banks call the loans and the whole house of cards

Musk and Trump routinely stiff their partners. 

[J.C.MacSwell]

1 minute ago, Ten oz said:

Musk and Trump routinely stiff their partners. 

Their partners probably didn't have the cards...even at the casinos...so in their minds who can blame them?

[Ten oz]

26 minutes ago, J.C.MacSwell said:

Their partners probably didn't have the cards...even at the casinos...so in their minds who can blame them?

It's a gamble. Sometimes partnering with them works. 

[swansont]

2 hours ago, Ten oz said:

Musk and Trump routinely stiff their partners. 

Ones with no leverage. Banks are harder to dodge, I think. He relinquishes the collateral. He might be able to renegotiate, but getting tagged as a bad risk makes it harder to keep borrowing.

 

[iNow]

2 hours ago, swansont said:

getting tagged as a bad risk makes it harder to keep borrowing.

Hence his entry into untraceable crypto