With liabilities over $200T, I think the only thing to do is to cancel all debts and focus on domestic food and energy production for a few years. Start over. Avoid famine and energy starvation. The 20th century was basically one big mistake, and we need to wipe the slate clean and rebuild our society with more emphasis on personal responsibility and personal property ownership.
I cannot disagree, but unfortunately, the political powers that be (in the Congress and of course, the President) are working at counter-purposes to what you propose. But you know this.
Watch: Interest rates for Government debt (USTs) will continue their march to Zero. Its all part of the plan. As interest rates get lower, the debt is cheaper to finance—so it can go higher and higher. Of course, the flip side is that its a tax on savers—who earn next to nothing on their capital. But because its a stealth tax, no one will protest.
This creates distortions in the system and is designed to induce more consumption. What happens is we slowly become a Zombie society, like Japan.
That’s what many people would argue has happened since 2008.
nearly everything that has happened in America since the civil war has been a mistake.
Spain, like Greece, is on the verge of utter economic collapse. No way the government there could solve its problem.
...but “boots on the ground” visitors observe that people are handling it very well: knowing the official/formal system is about to collapse, people are just moving everything off-book, normalizing a new underground economy, and carrying on rather well.
Yes, the $0.2P of liabilities ain’t happening no way no how. The buck will stop somewhere. Knowing it will stop, most people will find a way to be elsewhere when/where it does. Those who don’t, well, sink or swim.
The Soviet Union collapsed when it couldn’t issue paychecks. We’re approaching that point. Funny, Russia and its satellites still exist and are doing pretty well. We will too; maybe a different demographic arrangement, but on the whole “we” will manage.
“I think the only thing to do is to cancel all debts”
This will be as much of a train wreck as riding the train over the cliff. Much of the world and Americans are holders of that debt.
Resetting spending to 2.0 trillion which is about the current tax take the federal government gets and freezing the spending at that level indefinitely would allow us to grow out of the debt. 1.6 trillion dollars cut in one year?
Pretty much all federal social programs go away. The only social program left are payments to our military service men and women for disability. All federal pensions are cut to what we can afford to pay. Any and all government pensions are immediately converted to a 401K type retirement plan.
Federal government take of GDP needs to be at 15% max with 7.5% of that 15% going to pay down our debts.
We’re still talking complete and utter chaos. What do you do with 100 million people that get payments or some sort of welfare from the government? 30 to 40 million have no concept of life without money from the government putting food in their bellies?
This is crazy strong medicine that few Americans have the stomach for.
Don’t forget - cancelling all debts also cancels all assets.
You and i both know that 200T in unfunded is garbage. Either taxes will be raised or payouts of medicare and ss will be reduced or a combo of both. It’s my worry about how much of the US population will be dependent on the government when that has to happen and what their reaction will be when they find out there isnt enough taxes to be raised anymore.