US Debt Spiral Is Reaching Terminal Phase - Economic Reset Is The Only Way Out

If you are going to go out, you might as well do it with a bang. At the beginning of June, our national debt was sitting at $31,467,639,287,894.39. Today, it has risen to $33,442,148,619,617.43. That means that we have added almost two trillion dollars to the national debt in just three months.

It is the largest single debt in the entire history of our planet, and it will never be paid off. Our debt spiral has reached a terminal phase, and all we can do now is prolong the agony.

If we keep taking on more debt at an exponential rate, we may be able to extend our seemingly endless party for a little while longer. As for the bright future that our children and grandchildren were supposed to have, we destroyed that a long time ago, and so it doesn't really matter what we do now.

And I am not just talking about the United States. All over the world, politicians have been on the greatest debt binge in the history of the human race, and for quite a few years it seemed like they were getting away with it.

But now interest rates are rising and there is great turmoil in the bond markets. The following comes from CNN...

“Economic Reset = “You will own nothing”

We’ll certainly own less, mostly because we’ll be buying less.

The author never uses the term “economic reset” in his article. Perhaps the term in the headline is a form of click bate.

Here’s how he says it will all end: “it is always going to result in pain”.

>>The leading sentence to this article says the deficit increased $2,000,000,000,000 in 3 months. Are you saying it actually stayed flat or decreased?
>>

Neither Quantitative Ease nor Quantitative Tightening are part of an annual deficit.

The deficit is funded by borrowing money. Borrowing money is done by selling Treasury bonds. The lender owns the bond and collects the interest paid on that bond.

The Fed bought several trillion of the bonds. They created money from nothingness and bought bonds with it. They return the interest they get from Treasury . . . to Treasury. (All of the Fed’s balance sheet are not Treasury bonds, some of it is Mortgage Backed Securities that caused the 2008 disaster, and they bought those MBS from gov’t agencies like Fannie Mae. Ignore that, it is parenthetical).

The big jump in annual deficit much in the news lately is the Supreme Court ruling about student loan payments. Expunging those either increases or decreases the deficit because it is applied to the budget all at one time, or erased . . . before overruled by USSC.

Fundamental rule: Money is created by the Fed in almost whimsical fashion. It comes from nothingness. There is no requirement that any rules/laws involving it have to be logical. People would have actually died in 2008 if the Fed had not flooded the system with money. ATMs would have failed. Cash to buy food would have disappeared.

Don’t imagine US wealth is from capitalism or democracy or anything else of that sort. It comes from thin air.

Agree with your statements.

Bottom line is, Social Security ran a $21.5 deficit in 2022.(if I recall correctly)

Thus current wage taxes pay current retirees, almost.

My greatest concern is the shortfall in the General Fund. We are on deck for catastrophic changes.

10,000 baby boomers turn 65 every day and will continue to do so until 2030. In 1950 there were 16 workers for every retiree; today, it is less than 3; and by 2030 it will be 2 workers for every retiree.

Medicare is in worse shape than SS. The Medicare Trust Fund (HI) will be exhausted in 2028. There will be many painful decisions ahead. And one of the biggest will be guns versus butter. Butter usually wins because it has more constituents. Stay tuned.

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