Bitcoin Forum

I hear this a lot. In all these conspiracy and economic videos people say that this can't go on forever. At the first glance it seems obvious that parabolic rise can't go on forever but can anyone explain me why this is the case with US debt ceiling? These are just numbers in databases so why can't they be increased forever. Is US facing integer overflow with its debt ceiling?

Second question related somewhat to the first one. Let's say global politics is a competition. What if I loan a lot of money from other countries and never plan to pay back? I can then spend the loaned money on my military equipment so that if others start to demand the money to be paid back I could just show them the middle finger in the politically correct way.

The debt ceiling can be raised as high as the US government wants, but where do you think all that debt came from?

Foreigners and/or American citizens need to be persuaded to lend the country money. The interest on the debt is their incentive to lend money. If the American debt gets to high, they will insist on higher interest rates to compensate them for the risk. If interest rates get to high, the American government won't be able to sustain itself. At this point, it doesn't matter how high the debt ceiling is, foreigners won't lend their capital to the government.

There is a temporary reprive for the government. Becuase the US dollar is fiat money, they can print unlimited quantities. (This is known by the euphamism "quantitative easing"). However, as the amount of dollars in circulation increases, the value of each individual dollar falls. In this instance, interest rates still rise because the lenders factor in the fact that the money they are getting back is worth less and less. Simultaneously, this causes inflation. People who hold the currency, (predominately the middle and upper classes) are effectively stolen from to fund the government.

In summary, the debt ceiling is irrelevant. If politicians actually honored the debt ceiling, then it would be relevant, but by simply raising it every time they need to borrow more money the countries leadership shows that it has no intention of getting it's finances into shape.

You second question isn't theoretical. It is happening right now. There is no way the American, Japanese and British governments can ever pay back the debt they owe. None. By printing currency the USA and GB have effectively defaulted on thier debts. The Western world will at some point be forced into a severe recession of the type Greece and Portugal are currently experiencing. At this point the governments will be forced to cut spending back to a sustainable level. It is this brutal recession that fixes the problems that have been building up during the "great moderation" which is a term used to describe the period between the 90's and 2008 when interest rates where low and the economy was booming.

You mentioned that these countries could effectively threaten others that they owe money too. I don't think this is fesible. The Obama administration has shown it wants other countries to take the lead in Libya and Syria. The next president may be more gung ho, but bear in mind that enormous military spending has been financed with borrowed money, so this will have to be cut soon when interest rates start to rise again.

Peter Schiff and Kyle Bass are two hedge fund managers that have discussed this point in detail. A quick you tube search will give you a lot of info on this topic.

Most countries don't have a 'debt ceiling', thats all just part of a big charade in the US. However the US government has a huge deficit, like 1 trillion dollars per year or something, they're paying it off with more debt. This can't go on forever because its mental. You can't live on a credit card forever. 

Classic fallacy comparing a person with a credit card to a government.  Of course you could live on a credit card forever if you owned a money printing press.  The best thing is that once you are really seriously in debt, the lenders are screwed.  They are more scared of you defaulting that you are of borrowing.  So they reduce your interest rate.

Provided there is no better use for the money, the state can raise its debt ceiling forever.  It only starts to matter when there are lots of safer more profitable places to invest a few trillion than government bonds.  And that isn't ever likely to happen.

The second question is actually the answer to the first question, if you ask me. The US has been borrowing more than it can afford to repay for at least 50 years, and has spent most of it on military campaigns. Makes the ones doing the lending look just as guilty in the war crimes committed by the US.  

Well, I still believe that debt ceiling can be raised forever. Where did you get the info from?

As kokomoko said "If interest rates get to high, the American government won't be able to sustain itself. At this point, it doesn't matter how high the debt ceiling is, foreigners won't lend their capital to the government."

Which is pretty much equal to "cannot raise dept ceiling forever".

I personally and subjectively think that US keeps doing what it has been doing because
a) if they get more money from other countries they just use it to prepare for the great default
b) should great default happen, US will say "sorry dudes, I'm broke and you will never see your money again"
c) should other countries demand US to pay with its natural resources it will use the military force to defend itself (initially funded with the lenders' money).

win win for the US, am I right?

To me it seems like "C'mon man, borrow me your money so that I can become more powerful than you in the military aspect and will never have to pay you back because I'm stronger than you."

they have to pay interest rates for this debt. Japan is paying 1/3 of its income as interest rates. Guess what will happen when it will be 100% of income.

In other words, this can't go on because fuck you, that's why.
Hwaker's argument ("Classic fallacy comparing a person with a credit card to a government.") is spot-on.
Unlike bitcoin miners, which only shut down when the expenses of running them become greater than the coin they mine, government printing presses are extremely energy-efficient, and have plenty of margin to eat through before printing paper becomes unprofitable.

Further, fiat currency has no artificial ceiling which exists for bitcoin.  The maximum number of dollars in circulation is not limited to 21 million, 21 billion, or 21 trillion, and the only other "miners" the dollar needs to compete with are other fiat currencies.
Cheer up, the future of USD is bright 8) :D

Well, what's the point of having a debt ceiling when they increase it every time when debt is almost there. Its as good as not having :).

Bernanke says "appearantly, there is no inflation". He appearantly knows that more money leads to inflation, can't see it, and then shrugs and takes advantage of the situation.

The government is really like a person with a credit card, but with these differences: The governement lives forever, so the lenders don't  worry about that. Second, like a bully, it can just take whatever it wants from the constituents in taxes. Third, it can print new money and lend out non-existing money, which is analog to a bar owner diluting the whisky.

Bernanke is right - the current danger comes from unemployment not from inflation.  He can print money all day and all night but if the market is benefiting from massive oversupply of  capacity and labour, prices of manufactured goods won't rise.

When it comes to government and currency, the better analogy to compare to is a distillery and whiskey.  They can make as much as they want and charge whatever the market will bear.  

Because there are laws keeping out competition.  If anyone could make whisky, they would easily meet demand and price would be a small markup over costs.

Its game theory & con game rolled into one.  If the debt ceiling can be raised forever, I can assume at some point it will be 950+ Trillion and growing. This requires dollar creation to pay off. Knowing that each dollar is worth less in the future ad infinitum, I can conclude the dollar today is worthless.

But keep the dog and pony show going every time the ceiling is hit, and I might not make that conclusion. Expect bigger and better shows in the future.

More money does not imply inflation.  That's a misunderstanding on your part.  If for each new dollar printed an extra dollar's_worth_of_goods (stuff to buy with dollars) is created, the prices stay the same = no inflation.  


Again, this is false.  No one is lending "non-existing money" -- that money is as real as bitcoins.  As far as "bullying" goes, that's neither here nor there when discussing how things work IRL.  Personally, i think nice people should have more money than not-so-nice people.  Unfortunately, my opinion has no bearing on how wealth is distributed or the mechanics of national debt.

OK scratch whiskey - Ergogan used the analogy of whiskey being diluted in a bar.  

A government and money is like a shoe factory and shoes.  They can make as much as they want and charge whatever the market will bear.  

But they can't.  There are only so many feet that need shoes.

You're forgetting that whisky is an analogy only, and like all models fails in many respects.  Though the whisky made by people other than the government issuer may look & taste like whisky, it won't get you drunk like gobment whisky.  The "drunk" is the "backing" of currency.

Except, going back to money, bitcoin is the nongovernment "whisky" and it does the jobs of wealth storage and international transfer far better.

Actually they can.  Think about it.  A company make as many shoes as they want and sell for whatever the market will bear.  If they don't like the price, they will stop.  And its the exact same with governments and money.

Bitcoin co-exists with dollars the way sterling does.  Bitcoin is great for international transfers and for things you want kept private.  I don't accept its a wealth storage vehicle - I wouldn't expect someone saving for a pension to invest in bitcoin as the fluctuations would kill them. 

More money is inflation. Price rises will necessarily come, when the new money is dispersed. Appearantly, there is a lag - maybe years.


You really should investigate this yourself. The Fed lends out non-existing money, partly to the government, partly to the banks which deposit it back to the Fed but use that as collateral for lending to businesses and individuals. However it is used, as long as debt is a part of the money supply, more debt means inflation and eventually reduction of the value of the money unit. This is basic. Are you a holder of the Prize in Economic Sciences in Memory of Alfred Nobel by chance? If so, that explains your ignorance.

"Better" is pretty subjective here.  Bitcoin detractors can come up with a laundry list of why bitcoin's *worse* than fiat.  Though i don't agree with them, cheerleeding & blinding ourselves to actual problems is not helping us much.

Except history shows that money is a confidence game, and confidence can evaporate quickly.  If shoe prices fall, oh well, your feet are still covered.  If the currency crashes, now you can't eat.

Fuck shoes, let's turn into birds.

No.  To give you an illustration, imagine there's only one dollar and only one kitteh to spend that dollar on.  The kitteh is worth a dollar.  If another kitteh appears (our kitteh was preggers), each kitteh is now only worth *half* a dollar.  Deflation.  Print another dollar?  Each kitteh is now worth a dollar again.


I have investigated that myself, and i'm not sure how my holding a Nobel Prize in economics would "explain my ignorance."  Your logic seems a bit flawed.

If the currency crashes, there remains the same amount of food in the market.  No-one will go hungry.  If need be, people will use barter until another currency emerges.

Except that the food supply is now controlled by corporations, not family farmers.  Even when times are good, those who are at the bottom of the income ladder frequently go hungry.

So you belive the value of the money is dependent on the existing goods. This is not correct, the value originates from the minds of the individuals and their reservation demand for money.

<joke explanation> Krugmann has this prize, and he appears to know nothing at all about money.

you are not being logical now.  A currency crash does not cause family farmers to disappear and become corporations.  Corporations doesn't refuse to sell their products because of a currency falling in value.  And food in the market does get sold - even if only for bartering.  And none of this is affected by lifting the debt ceiling.

I never said that the currency crash would cause that, just that it has already happened, at least in the US.  Family farmers can't compete with government subsidized corporations.

Yes, eventually things will work out.  But in the mean time, millions of people who were already struggling will starve to death since their meager income is all they have to offer.  But, you won't understand that since your arguments boil down to "I have assets, I'll be fine, fuck everyone else".

For my illustration, i define inflation as rising prices.  In other words, "how many kittehs can a dollar buy.  If your definition of inflation differs, please state it :)


I find that your claim that *my* having a Nobel Prize in Economics explains my ignorance a bit lulzier.  Re-read what you have written :)

Ignore the debt ceiling which is just a charade the government puts up and focus instead on the debt. All the debt is earning interest. As the total amount of debt rises, eventually the interest on the debt will cost more than the country takes in in revenues from taxes. At that point the only way for the government to pay that interest is by borrowing more money (also known as running a ponzi scheme) or by printing more dollars. Printing more dollars results in inflation. As the rate of inflation goes up, people demand higher interest rates to offer more debt, and so a vicious cycle begins where you need to print even more money and you enter hyperinflation. One thing that could shake up this fiasco is if people start to demand debt denominated in something other than USD. Then the government would not have the option of just printing more money to pay back the debt.

The debt ceiling is like a guy with a credit card saying "I am not going to go more than $1000 dollars in debt", then when he hits that and still wants to buy stuff he says "I am not going to go more than $2000 in debt", he can keep going on up as long as he wants until he gets to his credit card limit set by the card issuer. Then it doesn't matter where he puts his own limit, he could say "I am not going to be more than $8000 in debt", but if his limit is at $2500, he will never be able to get to his debt ceiling, he will have to stop at $2500.

Not sure how this is a currency-related problem, other than those who have more of [whatever currency] are typically wealthier than those who do not have it.  Not implying that currencies couldn't be created [inflationary currencies] which would close the gap between the haves and have-nots, simply that [an eventually] non-inflationary currency would only exacerbate the schism.

Agricultural policy is nothing to do with the debt ceiling.  I bet if we sat down over a beer, we would be in 100% agreement about the madness of agricultural policies worldwide.  For example, Irish farmers are paid _not_ to produce milk as it loses money.  Imagine if ballet schools could do that  :P

The point I was making about the currency is that there is no real risk of it crashing and even if it did crash, life would go on just fine.  And while I appreciate you want to help the poor, they are going to be screwed no matter what system we have.

Same fallacy again in the same thread  :o

Its nothing like a credit card limit.  Owners of credit cards don't own money printing presses.  The government does.  If it all goes wrong, they can print more money.  That's why its a safe investment - it can never fail to be repaid.

Without getting into details (which is done over and over with neither side budging from their beliefs), how do you see the endgame?  What, exactly, would be a likely scenario if the dollar collapses?

And if irresponsibility crashes the current system, they will be the ones who die.

Even if it can always be repaid, it is still risky because what it is repaid with may be worthless.

The current system cannot crash.  Worst case, you might have a political madness that causes lenders to charge your government more.  And really, I don't think the system is doing much to keep the poor alive.  

But that's the beauty of it -- the debt is denominated in the same stuff [$], no matter how much that stuff's worth :)

It seems people have forgotten what ended the cold war (Russia going broke).

Strangely enough although Russia could print as many ruples as they wanted it didn't help them (as no-one ended up wanting them).

Although the US dollar is far more important it can (and likely will) suffer the same problem. China has already started talking about a "post-US" future (and they own most of the US debt).

The US shouldn't forget how it defeated Russia.

Interesting point.  And a lot of people agree with you: http://marginalrevolution.com/marginalrevolution/2007/06/why_did_the_sov.html

Good points all except a small correction.  Most US debt is owned by US citizens.  China has some but its not the big player.  If you want to see who loses should US default, look at pensioners.

Interesting - do you have a link to the figures?

I guess also that pensioners are not the most feared people by any government (including their own).

Pensioners make up probably 70% of the voting population in the US.  Democratically elected politicians fear nothing more than losing the support of their voters.

Then they're doing it wrong. A reasonable pension strategy is toss differnt percentages of your money at various things and forget about them for 40 years. Why on earth would anyone doing that care about fluctuations?

On that, I tend to agree.  I don't see hyperinflation of the USD as a real possibility in the next decade in the absence of some sort of institutionalized debt forgiveness (yeah right).  I was objecting to your statement that if such a crash did occur,
If you said, "Life would go on just fine for me", I could agree.

True - but when party A and party B offer the exact same thing (debasement of the currency) what choice do they have?

(am pretty sure that the pensioners are not the type to vote for party C)

If printing money does not cause inflation, then why does the government bother with budgets at all? They could just print up money and spend it on whatever they like. They could simply print up 10 million dollars for every citizen, hand it out, and then we could all retire and live in luxury. The truth is, printing money is a balancing act between goods and services produced and the amount of currency available for circulation. Go to little or too much and things get jacked up really fast.

Self-contained :)

Did you even read what I said? The credit card limit is not the debt ceiling, it is what lenders are willing to lend to the country. As the debt goes up it will be harder and harder to find people willing to lend money, just like as you max out your credit card it becomes harder and harder to find somebody to give you another credit card. What happens when people are no longer willing to buy US debt denominated in USD since it is inflating, and they will only buy US debt denominated in other currencies (whether it be gold, euro, bitcoin, whatever)? When people stop buying USD denominated US debt, then the US will no longer have a printing press with which to pay back the debts, and they will have to operate in the same world as the guy with the credit card. Would you give a guy a loan if his income is less than the minimum payments on his current loans?

What happens is, the Fed just buys all of the debt. There is no practical reason they cannot just buy it all if no one else will take it. Although, what that does to the exchange rate and the balance of trade is anyone's guess.

If the people's faith in USD is so low that they will buy US debt denominated in foreign currencies but wouldn't buy same debt denominated in dollars, two things become apparent:

1.  The people are confused & shouldn't be buying US debt period, no matter what it happens to be denominated in, since U.S. dollars are backed by the full faith and credit of the U.S. Government.  Don't throw your money away, no matter how the deadbeat promises to repay you.

2.  If "full faith and credit of the U.S. Government" is worthless, debt ceiling is the last thing we should worry about :D

Ok, quit the arguing. It's a complex picture, all you guys are proving is that for every single issue counter-point, there's a corresponding single issue counter-point.

You can't explain the effects of the USD on the world economy in such tiny bites of argument, you all end up trolling each other and yourselves simultaneously. The dollar has the biggest and most multi faceted effect on the world economy of all the currencies out there, and that's the heart of the matter really, as the nature of this relationship that all other currencies and economies and commodity prices and numerous forms of worldwide debt vehicles have with this uber-currency is now beginning slowly to change, Bitcoin being a highly potent but as yet not at all fulfilled alternative to the present situation. You're all trying to argue about a compex relationship that's in a state of flux, or about points of principle in isolation of the whole picture. Get a grip.

This is a difficult-to-discover cheat. The price has "stickiness". If it used to be one dollar per cat, then if there are two cats now and still one dollar, each cat still worth one dollar, and it is possible that they are not for sell so there is no need for extra dollars. Printing one dollar at mean time equal to stealing from the added production

The real question is: Are people really so stupid that without enough dollar they can't do the trade? It seems the major economy books think so  ;D ;D (I'm printing dollar to buy your goods because without my printed dollar you can't trade!!!)

Back to this picture, notice that 30.4% of the government debt belong to US individuals and institutions, but since majority of the wealth belong to 1% of the people in US, you can guess who owns all those debts

http://4.bp.blogspot.com/-TmWDzp6szDI/UPTIujerWuI/AAAAAAAAHV8/gu7jK8d5_d4/s1600/preliminary-fy2012-to-whom-does-the-us-government-owe-money.png

Anyway, if FED can do debt forgiven for the bonds they bought with printed money, I don't see there is any problem. But, if FED indeed like many conspiracy said is a private organization, then things will be complicated

The reason there is "no inflation" is because an exceptional amount of virtual/fake/real/whatever you call it *money* was destroyed in the last downturn. Especially in house values, the money that people were borrowing against simply ceased to exist.

If it had been paper money that was burned, there would at least have been value created in the form of BTUs of heat, but there wasn't even that.

Thus printing a "trillion" dollars or so simply replaced the M3 type "money" that "vanished".

Kind of weird, but it is what it is, and it is why gold is where it is and inflation is where it is.

C

Exactly and it evolved to what it is... and starting with Plaza Accord in 1985 this was really put in motion. Now that the cycle is over US will try to become an export driven country again driving confidence back into USD and thus creating more issues for everyone but itself.

In the end we dont know if this will work as China has caught on by now and is starting to forge ahead with skipping USD, which the US must have an issue with. Bitcoin is big in China nd the fact that the gov't couldn't get into the silk road wallet means its a very bullish story indeed for btc. I bet that SR was the ebst thing that ever hapend to BTC because it showed confidence in nations to see that the gov't with all its power can't break it. China's next move will be important.

Umm no inflation is where it is because of 2 things. THe model for calculating CPI is skewed to not show the real picture. The second and more important thing is that the USD is the base currency for trade around the world, and if you do a inflation index for the world from now and before you will see a different picture. Since it is being used everywhere the affects of inflation take alot longer to hit, but also take alot longer to unwind aswell if you were not to default. More and more likely the default scnario is playing out so play accordingly. Next few years we should start seeing bullish news for USD and it will rise, but after the cycle completes (3-5 years minimum) we should see a new downturn for USD and they probabyl will abolish it before taking a hit.

People's stupidity is absolutely irrelevant.  If a dollar which bought one kitteh yesterday is not enough to buy one today, that's price inflation.  If it can buy moar than one kitteh, that's price deflation.  Nothing tricky here.

You may be thinking about monetary inflation, which is defined as "We just printed moar money!"  In that case, printing more money does result in monetary inflation -- by definition.

Too many people use the word inflation without thinking about what, exactly, they're trying to say.  Monetary inflation may result in price inflation, but not always.  For instance, if our kitteh is slutting around, we can print money with impunity without causing inflation.  The nice people in charge of the money factories pay close attention to our kitteh, and know just what to expect when she's on the prowl >:(

If a dollar which bought one cat yesterday is not enough to buy one today, it just mean the exchange rate between them fluctuate, you can't tell if it is cat become less or dollar become more, or it is a pure psychological phenomenon that people suddenly start to worship cat

The amount of dollar and the amount of goods/services has no direct relationship. People like to have a stable unit of counting for value of everything, but since the price have stickiness, once that unit of counting has been established, the amount of money supply normally will not affect the price  (if the money supply don't change +- one magnitude in one year)

This whole metaphor depends on there being only 1 dollar and its holder want to buy a cat above all else.... that would be quite the psychological phenomenon.

I don't think i can put this into a simpler form.  I'm out of ideas.  I can repeat that price inflation means the prices go up.  This holds true regardless of what the causes, though cat worship is not one of them.  I use teh cat as a stand-in for "stuff," or "market basket" -- stuff that money buys.  Which shouldn't stop you from worshiping cats, they're pretty awesome.


If that were true, each year we could print extra nine dollar bills for each one in circulation, without causing the prices to rise.  Profit :P
Unfortunately, there's a strong correlation between the ratio of goods/$ & prices.  Which doesn't imply that "standard of living" is somehow tied into this.  If prices go up by 50%, but everyone has double the money, everyone can buy more.

Basically, the distortions come when the bubbles build up, for instance investment in high tech food production and transportation systems that are no longer usable after the crash. In case of a crash, if there is not a functional money system, if the government set price and wage controls, increases minimal wage, violent worker associations, hunger may occur. On the other hand, if there is functional money, and all regulations disappear, the system will reorganize itself in a matter of days.

Yes, this is what we are guessing about in this thread.

 :D :D

CPI is irrelevant. I'm using gold as the baseline, by all logical reasoning it should be at 3600 an ounce to 4800 an ounce today. It is not, it's around 1200. It was at 289 in 1999-2000 when I bought some.

The reason it is at 1200 now is the same reason it went from 300 to 1800 when there was "no inflation" in the 2000's. There was of course, then a massive deflation.

Gold is.

It will not fix anything. Greece is preparing to ask for third money injection and definitelly not last.

Even us, if we'll have no deficit starting next year, we will pay out the debt no sooner than 2030, probably later because the almost-zero interest rates will have to grow in future so also our debt interest rates will grow.

Now, look at Greece and other countires (Portugal, Slovenia, Italy etc). They are not anywhere close to no-deficite budget and they are also much higher on the exponcencial curve. That means they won't be able to pay that. They may be by the end of this century if they tried to manage their national budgets wisely. But are not at all. Just a few countries will ask for another help and sooner rather than later the whole EU will collapse like house from cards. US is the same or even worse. What spending cuts are you talkign about? They printed dollars the way it never happened before during the recession and pumped hundres of bilion into the economy, there were no cuts at all. Each time it will only get worse and it will never be payed of. The debt is too large now. Most of the western-type countries have already crossed zero line.

It indeed happened after 2008 when FED effectively printed 4x more dollar bills for each one in circulation. But only banks receive those printed money. They accumulated huge amount of dollar during the process and they never spend them

For them, having 1 billion dollar or 10 billion dollar basically has no difference, they all get deposited back into a saving account at FED and they receive a small interest from it. Only that interest will be spent, even FED printed 4x more money, if the interest is only 1%, that will equal to 4% more money flowing into the society, won't cause any noticeable inflation

I'm now convinced that everything you say is true -- all of the civilized western countries, doomed from the moment they have adopted fiat, are racing each other towards a grizzly economic apocalypse.  I'm a huge fan of post-Armageddon/black futurist/dysphoric imagery, and i want more.  Could one of you write an Economy fanfic for me, hopefully featuring BTC/LTC shipping, pl0x?

Since you simply can't print money indefinitely to cover expenses, you need to cover every $ you print buy some other value....

as long as you take their good old greenbacks as long they can go deeper into debt. but someday nobody accepts their worthless fiat dollars anymore...

Our printing presses are well maintained & came with a lifetime warranty.  The printers are dedicated professionals, ever eager for overtime pay (sometimes we incentivize them by letting them "take all they could carry," they're like kids in a candy store, i swear!)
I see no money-printing problems arising in the near future 8)

That will never ever happen.  As long as US taxes are payable in US dollars, there will be a market in dollars.

Zimbabwe is an example of political vandalism - Mugabe rejoiced at the destruction of capital and landholdings his policies engendered.  If that ever happened to the US, there are a great many other countries that would fall first. Heck even Ireland would struggle  :o

Agreed. I was just scrolling down the page wondering why no one had mentioned Zimbabwe. It used to be the 'breadbasket of Africa', now it is a basket case.

Internally the US govt might get away with printing money but at some point other countries won't value their debased currencies and will demand their own fiat or bitcoins for their goods.

I think the (potentially violent) turning point will be when oil producing countries start to price oil in non USD currencies or even bitcoin.

Exactly.  I have notebooks full of ideas that never got anywhere because of regulations and patents.  Our system allows trivial things to be patented, and they are only tested for triviality if someone has the funds to take the patent holder to court.  Where patents can't keep out competition, regulations abound.

Something like zimbabwe dollars? If printed 10 million dollars for every citizen, we could use one hundred bills as toilet-paper

And lose their best customer?
Zimbabwe's about double the population of NYC with GDP per capita ~100 times lower.  I frankly don't even know if they have an air force, prob'ly not much of a navy (Flagship must be trailered to a foreign boat landing on a dunker trailer with expired plates), and certainly no nukes.
You must agree it doesn't scale well :-\

At one point toilet-paper is more expansive then printing zimbabwe dollar, they could use toilet-paper as a currency :)

There is not enough production rate in the States. If keeping raise the limit, this can be problem due to the low value.