Debt and Inflation Threaten U.S. Security

Servicing costs could soon reach $1 trillion a year, which would crowd out spending on defense.

The national debt this month reached $30 trillion. Not only is this the largest debt in U.S. history in dollar terms, but the ratio of debt to gross domestic product is 119%—the largest it’s ever been. And things are only getting worse. The Congressional Budget Office predicts that the mammoth debt-to-GDP ratio will double over the next three decades. The Highway Trust Fund will likely become insolvent in 2027. Medicare Part A will run out of money in fiscal year 2026 and Social Security will go bust in fiscal 2033.

Now Americans are beginning to experience inflation, one of the primary costs of rapidly growing levels of national debt. Every day we hear that supply-chain challenges and the pandemic are to blame, but they aren’t the only culprits. “Inflation is always and everywhere a monetary phenomenon,” Milton Friedman said. To help finance $5.9 trillion of Covid relief, the Federal Reserve purchased Treasury debt from third parties, typically large banks known as primary dealers, and then with a few keystrokes the Fed simply created a new set of credits on its books for the sellers. Because of the additions of these credits, in two years the Fed’s balance sheet has doubled to almost $9 trillion, creating a risk of significant and sustained inflation.

Those who believe there can never be a debt crisis should look no further than the last financial crisis. For years, policy makers told us that Fannie Mae and Freddie Mac, the largest players in the housing market, would always remain solvent and strong. They were wrong.

We’ve had years of denial, delay and neglect in confronting the unsustainable national debt.

--- "Total US unfunded liabilities closer to $200 Trillion ?"

An opinion from a Liechtenstein bank....

"Almost on a daily basis, financial experts have been criticising the approach taken by central banks. Hardly anyone would have wanted the current extent of the monetary and fiscal policy initiated in 2008. But neither at the time nor in 2020 did central banks have a choice other than opening the monetary floodgates. The alternative would have been a collapsing financial system with dramatic consequences for the entire world population. The central banks opted in favour of the lesser evil by supporting the financial markets and national governments with trillions of US dollars. As a consequence, the debt levels of many countries have reached record highs. Despite these records, it is unlikely that governments will undertake effective debt reduction reforms. On the contrary, governments will continue to struggle with persistently high spending and low economic growth."

https://www.neuebankag.li/en/perpetual-debt

To my mind, the idea of "perpetual debt" is the dream of the modern plantation owner. Keep the slaves/serfs in perpetual debt while a privileged class lives well above them.

All one need do is abrogate the debt -- yes, with collateral damage to many -- and the elites' would topple. This is not an unusual notion.

The Jubilee year is a millennia-old idea. The elite want a "interest-forever" situation, which is answered with the ease of abrogation, which is not only economic but political. Abrogation has been the method for releasing a citizenry from perpetual obligations, with various periodicities suggested. Ours is well past due.

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