#480 — The Economics of Everything

Sam Harris speaks with economics writer Noah Smith about his background and the growing concerns surrounding the United States' national debt. Smith explains how rising interest rates and continuous borrowing to cover interest payments could lead to inflation and economic instability.

This segment explores the potential risks of the rising US national debt and how human psychology, rather than a fixed economic threshold, determines when a country's debt becomes unsustainable. The hosts discuss how a sudden shift in investor confidence could lead to a catastrophic run on US debt, complicated by the dollar's role as the global reserve currency.

Sam Harris and Noah Smith discuss the potential consequences of a loss of confidence in US debt, highlighting the risk of catastrophic capital flight. Smith critiques Modern Monetary Theory (MMT) as an unscientific set of arbitrary pronouncements led by a small group of gurus. They also examine the growing burden of interest payments on the US national debt and potential paths toward fiscal austerity.

Sam Harris and Noah Smith discuss the challenges of managing the US national debt, exploring options like fiscal austerity, high-skilled immigration, and the risks of inflating the debt away. They analyze the potential for hyperinflation under populist policies, drawing parallels to Venezuela's economic collapse.

Noah Smith and Sam Harris discuss the missed opportunities in managing the United States' national debt, particularly the failure to lock in long-term low interest rates. Smith argues for a balanced approach to austerity that includes raising taxes across the board—including on the middle class—and restraining spending growth.