The Treasury will continue to initiate the types of bookkeeping maneuvers it has used in the past to keep the government from breaching a level that would trigger a default on the massive national debt.
……..
The amount of the debt that is held by the public currently totals $22.1 trillion, an amount slightly higher than 100% of the entire economy and heights not seen since the huge borrowing the government did in the 1940s to finance World War II.
I genuinely believe that, in one way, the national debt has become absolutely irrelevant. Simply, there is no feasible way to pay it down without going Weimar on it’s butt. The best anyone can even hope for is to slow down it’s growth.
I remember the Carter years and the inflation. I don’t remember it’s real-world affect on those around me because I was just a kid with no real interest in economics. Nowadays, I’m an aging survivalist with a real interest in not being a homeless, broke, beaten down wretch…so I follow economics like a man with cancer follows drug trials.
End of the world? Probably not. End of your world? Quite possible. A smart man will have eliminated as much debt as possible, put away a goodly amount of cash or cash-like instruments for when his job disappears, and stocked up on things he’d rather not be forced to buy during a period of austerity. And….thats actually a good policy to have even when the economy is doing well.
There is a time when you can still do something to save the ship, and there is a time when the best thing you can do is head for the lifeboats. The critical part is knowing which particular moment you’re in and acting accordingly.
To your point, the long-vilified “Tea Party” formed organically as a protest against our logarithmic debt. They’ve since disbanded (I suspect) because most realize we’ve fully crossed the rubicon.
The only two real options with debt are 1) pay it back and, 2) default. With the constitutional prohibition against a strict default’, the remaining option is Weimar.
When does logarithmic debt end? No one can say, but we’re definitely riding “the curve”.
Suspect the crypto-madness is symptomatic of society’s desperation to get out of fiat while they still can.
We had this much debt as a percentage of GDP at the end of ww2. How did we get that to a manageable level and can we do that again? I never quite understand how e can have educated people who want to work and the govt screw the economy up so bad. Greed and ambition for power from the powers that be, I guess.
A big part of paying down that debt was economic growth with little competition. The rest of the world was literally wrecked, add in all the pent up demand… hard to recreate those circumstances. Not sure we would want to.
A large part of that debt was “War Bonds” that were a patriotic jesture and never meant to be paid back. The dollar was real money and newly installed as the reserve currency with the financial center of the world NYC and Texas as the energy center with the worlds industrial centers in Chicago,Detroit,Cleveland,east coast.
At the end of WWII, the US was THE powerhouse of manufacturing. We had the factories and made stuff the rest of the world wanted. We have since torn down those factories (or turned them into condos). We are now obsessed with saving the world by going green and reducing our carbon footprint. Put that on our gravestone.
Times are going to be very tough ahead.
It doesn’t have to be the end of the world – it just has to be the end of this house of cards that we call modern society. Once these government handouts end, which we all know are unsustainable, we will see homelessness and unemployment on massive levels. Inflation/interest rates will increase – will they reach uncontrollable levels is the question. We presently have a system that has been manipulated for so long that the government and the fed are running out of options to try and keep it afloat.
It doesn’t have to be TEOTWAWKI for things to get really bad. All it has to do is get to a point where money is devalued, or interest rates are so high (like the 17% we saw in the 80’s) it sends our society into a tailspin. Empty shelves at the Costco, or even worse, full shelves of food priced so high that people can’t afford it, will bring about the downfall of our society just as surely, if not quite as quickly, as an EMP.
No politician in either party has the guts to propose the type of serious austerity measures we would need in order to right the ship at this point. I’m talking about raising the age for retirement and social security in line with current life expectancy, and drastically cutting back on social services. Those measures lead to rioting in European countries which enacted them.
Even if a politician had the brass to suggest such cuts, they’d never get elected anyhow. Americans want their stuff, but don’t want to pay for it.
Moving money to stocks, crypto, gold/silver, and land is prudent. Land that can provide income is great too, but obviously difficult to buy in small increments.
Regarding debt, I understand the wisdom of reducing debt, but the flip side to that argument is–if your debt has a set interest rate–it only becomes more affordable to pay off as inflation occurs.
Its not possible to have that level of austerity and pay our debts.
The US can at most take in 20% of GDP in taxes , this a function of the Laffer Curve known colloquially as Hauser’s Law.
Problem is that 40% of the GDP is government spending so if you cut half somehow, basically by gutting the military and social programs you also lower the GDP by 16% or so.
So you now have a smaller economy to draw taxes from which makes cuts much less effective.
As for debts, inflating out of consumer debt won’t be allowed because it would wipe out the investor class.
Instead wages will be kept suppressed as long as possible and where possible debts will be inflation indexed like many mortgages and credit cards are now.
Nothing pays better than paying off debts.
“if your debt has a set interest rate–it only becomes more affordable to pay off as inflation occurs.”
This is true. But that debt is still a liability lurking in the background. If the economy gets to a stage that inflation is at a point where it makes paying off your debt easier, then the economy is also probably at a point where your job is in jeopardy. And even with wild inflation, a contract is still a contract and folks will still foreclose on your house, repo your car, garnish your accounts, etc when youre not paying on them due to job loss. So…not having those debts around is still a good idea.
Being a repo man probably comes with pretty good job security.
Yeah, but there are some careers that just don’t translate well into getting older and becoming less physically adept. Repo man is probably great if youre a guy in his twenty or thirties, but not a great career to get into when your fifty and have a bad hip.
As A preppier Commander, you’re part way there already. With the asinine antics only increasing throughout the world by practically everyone, there are seemingly rare exceptions, it’s becoming even more imperative that one take care to be as independently self sufficient as possible.
The ferals will continue to feral and cook the books to their advantage, they have been so corrupt for so long it’s impossible for them to change without the complete burn down of the entire works. We already have a working Constitution, (barely used) so we don’t need a new one upon the “great burning”. All we need do is eliminate ALL offenders & rebuild as the founders envisioned. It’s coming, just when & how is debatable.
I recall some guy, I believe in Texas, a few years ago which the ferals finally dropped charges against as they realized they had no hope of prosecuting him for said offenses. I recall they could not get to him because he refused to leave his property and had not left at this time for somewhere around 17 years… Not thats what you call self sufficiency.
So the point of this little diatribe is to eliminate yourself from the hassles and worries associated with the asininity of our modern world. You will be happier and find the world is much the same as it has always been, without all the assholes…..
I never cared to watch the various zombie shows – people returning from the dead just wanting to eat flesh? C’mon man. But then it occurred to me that hoards of starving people, just out for their next bite of food and a place to squat might very well be the same thing. Maybe it’s time to starting looking to binge watch to get some pointers on dealing with them.
Head shots.
Tom:
Only if you start with politicians (Justifiable Homicide/ Self Defence)….
We’re going to get to the austerity, one way or another.
My vote is Weimar, because the globalists want nothing more than to destroy the US dollar and transition to a world reserve currency they have control over.
History says that the citizens of empires experience a 20% fall in standard of living when their currency loses world reserve status.
This time is NOT different.
Max:
What is WRONG with you!
Don’t you WANT the New World Order to replace the Dollar with the Yuan?
Shame on you…
(Wow, the sarcasm is getting deep round here…)