Wikipedia:Reference desk/Archives/Humanities/2020 April 17

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April 17

Flag of Vanuatu

According to the Flag of Vanuatu page, the flag was adopted in February 1980, ahead of independence later in the year. Was this the official flag of New Hebrides in the intervening months? Hack (talk) 01:46, 17 April 2020 (UTC)

I think the word "adopted" simply means that an official resolution was adopted designating the design as the flag of the future independent republic. If you want to raise the new flag to mark the moment of achieving independence, the design has to be finalized in advance. According to this article, flag raising was a prominent aspect of the independence celebrations, with "over 91 flag raising centres" throughout the islands. (Does that mean 92 flag raising centres?) If the flag had already been replaced earlier and thus remained unchanged at the moment suprême, I think the flag raising would not have had the symbolic value warranting the effort of ceremonies at that many flag raising centres. Also the language used in the remainder of the article ("The National flag ... gave the people their first rightful identity as the citizens of the new Republic of Vanuatu", "The new nation was born with its own national constitution, national flag, national anthem, coat of arms") supports this.  --Lambiam 09:01, 17 April 2020 (UTC)

This video: Vanuatu History Documentary (YUmi Winnem Freedom), shows (after 53:00) the Union Jack being lowered at midnight with much colonial pomp and a Royal Marine band playing Sunset, and then the new president being sworn-in. 12 hours later, the Vanuatu flag is raised while a local choir sings How Great Thou Art, and Prince Richard, Duke of Gloucester reads a message from the Queen. Alansplodge (talk) 10:54, 17 April 2020 (UTC)

Isn't the U.S. federal government gonna go broke?

I'm worried about the U.S. stimulus package, giving a lot of Americans $1,200. The $2.2 trillion. And talk of giving more money away in future months. Good for the people sure, but isn't this bad news for the federal government?? 67.175.224.138 (talk) 12:10, 17 April 2020 (UTC).

A topic that is covered in extensive detail on the article about national debt of the United States. The general consensus by economists is that the effort to stimulate the economy and replace lost income is crucial, and that alone outweighs the cost of doing nothing and thus triggering a total economic collapse. It's also very likely that it will not be the last stimulus package of its kind this year.--WaltCip (talk) 12:26, 17 April 2020 (UTC)

The standard hope or expectation is that this is effectively an investment - that stimulating the economy will eventually result in more tax revenues for the government. <-Baseball Bugs ^{What's up, Doc?} carrots-> 12:51, 17 April 2020 (UTC)

One of the things that the U.S. debt hawks always ignore is that the U.S. economy is not entirely like other economies, and where other historical or modern countries have run into debt troubles (say Spain under Philip II or modern Greece) is that the U.S. maintains the world's most important reserve currency. The U.S. government has financial and monetary tools in its toolkit that other countries do not necessarily have access to (there's some criticism to be made that the U.S. economic strength in such matters is built on the backs of other economies that aren't so endowed, but that's a discussion for another day). What that means is that the U.S. is in a sui generis economic position in many ways that allow it to leverage debt in such ways that other countries can't. The U.S. capacity for sovereign debt is not infinite, but it also has the ability to absorb events such as this in ways that other economies can't. There is a limit, but the U.S. has really never come close to hitting it. --Jayron32 13:12, 17 April 2020 (UTC)

A better time to ask this would have been around the time of the 2017 tax cut (Tax Cuts and Jobs Act of 2017), when major increases to the U.S. deficit were enacted to reward Republican donors (the rich and large corporations), while this year's stimulus was enacted to mitigate economic problems and ease hardships caused by Coronavirus. Since the congressional Republicans (who previously posed as the champions of limited government and fiscal probity) showed in 2017 that they didn't take deficits seriously, good luck in trying to convince most non-Republicans to take the debt seriously... AnonMoos (talk) 19:26, 17 April 2020 (UTC)

All the above, plus they can always mint a trillion-dollar coin. 2601:648:8202:96B0:E0CB:579B:1F5:84ED (talk) 00:26, 18 April 2020 (UTC)

So long as the United States can borrow money effectively for free (that is, interest on the debt is less than or equivalent to the rate of inflation), there is literally no reason *not* to borrow money.

Just about every dollar borrowed by the United States since 2010 has been at a negative real interest rate, making that borrowing literally free money. There is zero risk of the United States government ever defaulting on its debt, hence it is the definitive place for a flight to quality to land. NorthBySouthBaranof (talk) 01:07, 18 April 2020 (UTC)

If I was a creditor of the US and Trump got re-elected, I'd take an insurance against the USA defaulting.  --Lambiam 20:08, 19 April 2020 (UTC)

Me too. He has a track record of bankruptcies. And it's not WP:NOTFORUM to state that. It's a known fact.--WaltCip (talk) 02:27, 20 April 2020 (UTC)

More directly to the point of the question in the header: a government with monetary sovereignty can only "go broke" (default on its financial liabilities) if it chooses to. It can borrow money if people are willing to lend to it, and it can always assess taxes to obtain more revenue, or create ("print") money to redeem its debt. If it creates too much money (expanding the money supply too much), there is the potential of high inflation, but too much is a relative term. At present the U.S. debt-to-GDP ratio is not especially high; it's less than half that of Japan. You need to look at percentages and relative amounts, not nominal values. A trillion U.S. dollars is a big number, but in the context of a U.S. economy with an annual output valued at many trillions USD, it's not so relatively large. --47.146.63.87 (talk) 00:58, 20 April 2020 (UTC)

The answers here are generally spot on (particularly Jayron32): the US will remain solvent right up until the moment it isn’t, and there is no way of knowing when (if) that moment will be.

AnonMoos alludes to the role of revenues, which is just about always the reason for large deficit (spending takes far too long; revenues, as we are seeing this year, can vanish in a sneeze). However, the 2017 tax cut was taken at a time of relative economic strength, and while it was wholly wasted as a fiscal policy action, it wasn’t all that much worse than what Reagan or W Bush had done before.

NorthBySouthBaranof mentions interest rates, which have a big impact on the cost of servicing the debt (the remaining influence is how much is coming due this year). The thing to bear in mind is that we are pretty close to average (for the past 35 years) when it comes to debt servicing payments, and the economy is much larger than in the 1990s.

Lambiam makes the frequent mistake of assuming that the US can default on its debts. That is not the case. “Fourteenth Amendment, Section 4: The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” That has been widely interpreted to mean defaulting would be unconstitutional. In other words, the United States cannot, without a constitutional amendment, choose to default. DOR (HK) (talk) 12:53, 20 April 2020 (UTC)

Addendum: Right now, the U.S. Government can borrow money for free (that is, at negative real interest rates) for up to the 30-year length of a Treasury bond. [1]. NorthBySouthBaranof (talk) 02:13, 22 April 2020 (UTC)

So I guess my lack of understanding is the federal government doesn't store it's money in it's own bank account, but also on bonds? So it never really hits 0? 67.175.224.138 (talk) 11:11, 23 April 2020 (UTC).

United States Treasury security has some details, This 2018 audit of the U.S. General Fund may also be useful to the discussion. --Jayron32 12:40, 23 April 2020 (UTC)