The United States won’t default on the debt. And taxes can be raised only so high.
This leaves only one way out: the printing press (and hyperinflation).
Zimbabwe, here we come!
Posted on 10/05/2023 10:23:10 AM PDT by SeekAndFind
America faces a crisis that we acknowledge yet shamelessly exacerbate for political expediency.
Our leaders sit on their hands, under the impression that the consequences will patiently wait for their willingness to address them.
Meanwhile, our cities and quiet suburbs are oblivious to a grim reality gathering overhead.
This crisis is our national debt, standing at a colossal $33 trillion. That's the equivalent to the economies of China, Japan, Germany, India, and the United Kingdom, combined.
This figure provides useful context, yet the true challenge lies in the annual amount required to repay that debt.
In 2023, the government shelled out a staggering $663 billion to service this debt. The Congressional Budget Office (CBO) predicts that within four years, interest payments will exceed defense spending, and by 2051, surpass even Social Security as the largest share of the federal budget.
This is an existential threat of greater immediacy and severity than any other we face. It hinders our capacity to tackle all other concerns, including what is often referred to as "climate change". Our present investment in energy alternatives not only worsens our debt dilemma but also gives rise to fresh challenges. It escalates short-term energy costs and, by transitioning away from conventional sources, jeopardizes the resilience of our energy grid in the long run. At that point, we might find ourselves financially incapable of addressing this issue.
We are teetering on the edge of financial collapse, a vital point poorly represented in our shallow political debates. The common refrain, "we are passing on a bill to our children and grandchildren," is overly simplistic and fails to highlight the danger of this situation.
This is not the same thing as sticking your friend with the dinner check; this is like jeopardizing their ability to ever pay for another dinner.
(Excerpt) Read more at americanthinker.com ...
Here’s an easy one...
What part of the Constitution authorized Congress to enact
“entitlement programs”?
Take your time. I’ll wait.
RE: What part of the Constitution authorized Congress to enact
“entitlement programs”?
I’ve asked my liberal friends similar questions regarding MANY other government programs.
Inevitably, they refer to the “Commerce Clause” or ask me in return : What part of the constitution PREVENTS Congress from enacting “entitlement programs”? In their minds, what the constitution does not specifically address is not a reason for prohibiting Congress from enacting new programs.
abused.
Art 1 Sec 8 is a list of things Congress is ALLOWED to do... Beyond which... they were to have NO POWER. At all...
Pre-amble to the BoR even states that the following are “declaratory and restrictive” clauses... meaning they are meant to prevent Government from encroaching on the listed areas in the strongest terms available at the time...
Hundreds of Federal agencies and Departments to do 17 specific, and accepting for the oft abused Commerce Clause, and limited jobs...
Entitlements are the opposite of general. They are very specific.
Yes it is abused.
And please don’t get me wrong... We all are very familiar with every excuse people on both sides of the political aisle use to prop up their favorite extra-Constitutional programs and issues.
The United States won’t default on the debt. And taxes can be raised only so high.
This leaves only one way out: the printing press (and hyperinflation).
Zimbabwe, here we come!
And if we don’t get Congress to do something about it now, we never will. There is only a swell of support for cutting spending, even on the right, because inflation is out of control.
When that gets below a critical threshhold, most of the people on the right will go back to spending being a low priority on their list of things to worry about, and they will no longer bother to hold Congress’ feet to the fire. So it’s now or never.
My problem is most deficit hawks hate import tariffs. Look it up tariffs paid for all the wars and most of the budget up to WWII. Note: during the US Civil War there was a temporary income tax.
When Congress increases the debt limit every year new Treasury bonds get created and sold.
Eventually the Fed ends up purchasing them. This “monetizes the debt”, which increases the quantity of dollars and devalues the dollars already in existence.
Which we experience as inflation.
In Milton Friedman’s words “Inflation is always and everywhere a monetary phenomenon.”
Inflation is always produced by high public spending and a growth in money supply to accomodate it.
“What part of the constitution PREVENTS Congress from enacting “entitlement programs”?”
At least it’s easy to answer that. The 10th Amendment.
This is all - ALL - the result of allowing money creation out of thin air, and worse, to permit decentralization of money creation to entities not responsible to Congress or the Treasury.
Pare the government down to an explicit reading of each of those Art 1 Sec 8 jobs... We could pay for everything else of tariffs and usage fees.
Of course, that would mean no more foreign aid, no more Nanny State agencies that even the GOP loves, and a complete stoppage of every entitlement program out there. Full Stop.
People’s heads would explode. But then again... maybe that wouldn’t be a bad thing either...
dems think they can tax their way out of it.
But there’s not enough to tax short of confiscate everything.... We need to cut spending in a way that matters... Not just cut a projected increase by 10% and call it a tax cut.
Or we print out way out of it. Bye bye any savings... Hello Zimbabwe.
been hearing this BS since the 80’s
The sad truth is, Republican politicians only care about this issue when a Democrat is in charge. They only use this as an excuse to attempt to stop liberals, which I get, but I just get tired of being lied to.
All of the data used in the following analysis is from current US Treasury financial reports.
https://www.fiscal.treasury.gov/reports-statements/financial-report/
Current year projected revenue from all sources is projected to be $4.33 trillion. (Projected through yesterday, September 30th, 2023, the end of the current fiscal year for the US Government.)(Note:This is down from the 2022 Total Revenue of $4.90 trillion.)
Social Security and Medicare tax revenue for 2023 is 37% of the $4.33 total revenue or $1.60 trillion. (The government keeps this combined with the general fund to distort the picture.)
Thus total revenue excluding Social Security and Medicare taxes is $2.73 trillion. (This is the US General Fund money available for all government operations. )
Current (on the book) national debt is over $33 trillion. At 5% interest on our debt, annual interest would be $1.65 trillion.
$1.65 trillion interest divided by $2.73 trillion revenue is 60.5% of total revenue must be spent on interest.
Or to look at it another way, $2.73 trillion revenue less $1.65 trillion interest leaves $1.08 trillion TO PAY ALL OTHER BILLS.
Hate to say it, but we are already beyond bankrupt. I don’t see any possible solution no matter who wins the next presidential election.
And the 5% interest rate is a low estimate of interest rates on the debt. Many of you remember the early 1980’s when Treasury Securities were over 15% interest rate.
Historically, the 90 day T-Bill rate was inflation rate plus 3%. Thus with the current inflation rate, we are already over 5%.
If we divide the total revenue by the total debt, $2.73 trillion divided by $33 trillion debt, the percentage is 8.3%. That means if the interest rates on our national debt reach 8.3%, it takes 100% of our revenue just to pay interest WITH NOTHING LEFT TO SPEND ON RUNNING THE GOVERNMENT!!!
There are NO SOCIAL SECURITY TRUST FUNDS. They have all been invested in US Government General Fund Debt and spent.
I hate to predict this, but it is obvious that Social Security and Medicare will soon collapse, along with the US Government.
Our Government just voted to kick the can further down the road rather than address the current trend of deficit spending. While raising taxes will be necessary, a quick review of our financial statements reveals that soon we will not be able to raise taxes enough to pay the interest on the debt.
There are many other factors I have not addressed to keep this summary simple. These include unfunded pension liabilities of all federal government employees and retired military, loan guarantees, off the books agency debt from all the low interest mortgages, and many other contingent liabilities.
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