Posted on 03/05/2021 8:42:09 AM PST by Kaslin
Did you know America is going bankrupt? Most people don't. Maybe the saddest part about our country's state of affairs is that all our vitriol and dysfunction has come at a time when we aren't even addressing our biggest problems. It would be one thing if America collectively decided we have to be honest about where we are as a country and we were in the middle of a charged debate about how to fix it. Instead, we are fighting about trivial things while pretty much everyone in the country, on all sides of the political spectrum, has decided our real problems are so bad we may as well ignore them. Have you ever had a friend who's had some horrible, embarrassing event in their life? The last thing you want to do is mention it. That's America and our debt problem. It's so bad that we don't talk about it anymore.
It was a full 10 years ago that we were so focused on our debt that then-President Barack Obama was forced to set up a national commission to deal with it. The bipartisan commission led by former Bill Clinton Chief of Staff Erskine Bowles and former Republican Sen. Alan Simpson came up with a series of recommendations, including tax hikes and reforms to our entitlement programs. They were attacked by both the right and left, and none of the solutions were enacted into law, but at least we were trying.
When the Bowles-Simpson commission was formed, America was about $13 trillion in debt. Today, we owe more than double that, more than $26 trillion. Those numbers are so big nobody understands them. To put it in perspective, our entire economic output in 2020 was $21 trillion. If America could magically not spend a dime -- nobody bought anything, including food or other staples -- and we put it all toward paying off our federal debt for an entire year, we still wouldn't pay it off. In more personal terms, our federal debt now amounts to more than $81,000 for every single person in the country, or over $227,000 for the average household in America.
If the problem is twice as bad as it was 10 years ago, why don't we even discuss it anymore? It's as if we are so close to the iceberg that it's too late to avoid it. Let's just keep the band playing and enjoy things while we can. It's all going to be our kids' problem. This is, of course, a fundamentally anti-American sentiment. The goal of leaving things better for your kids is as American as apple pie. We are certainly not doing that any more.
Our national desire to wish our problems away is so severe that we have even come up with an intellectual framework for it. Modern Monetary Theory, or MMT, is the belief that deficits and debt don't really matter for a sovereign country that can print its own currency. Need more money? You just keep printing more. It's like magic. The bill never comes due.
MMT proponents ignore or explain away the downside to the constant printing of money and issuance of debt, including our creditors losing faith and no longer buying our bonds, hyperinflation and the consequences for the dollar as an exchange traded currency. Despite these huge flaws, it's amazing the extent to which MMT has caught on as a convenient political excuse to continue ignoring our imminent debt disaster.
What will happen in a debt crisis; why are we ignoring this obvious and impending catastrophe; and what should we do about it?
At some point, as we continue to borrow money, the interest we pay on our debt will be so high we will not be able to afford the rest of our budget. The solution will be to borrow more. As the borrowing binge grows, those buying our bonds will grow worried and demand a higher return. This, in turn, will create a vicious debt cycle, which has already happened in many countries around the world. The result is catastrophic reductions in spending and increases in taxes to try to satisfy creditors to keep the money flowing. The only reason we haven't seen it yet in America is we are such an economically powerful country that our creditors have not yet lost faith in our ability to pay it off. If that day comes -- and unless we make changes, it eventually will -- the crisis is going to hurt all Americans.
We are ignoring our looming debt crisis because it's not a winner politically. Both parties contributed to the problem. The Bush, Obama, Trump and Biden administrations will all be to blame. Republicans, traditionally the party of fiscal responsibility, have lost all credibility on the issue. After shutting down the government over spending under Obama, they spent happily at record levels under Trump.
It's attractive for politicians to keep taxes low and spending high. Each of our last four presidential administrations has benefited from this dynamic. Wall Street and global business, which dominates Washington policymaking, has also benefited greatly. These corporate actors care about their next financial quarter a lot more than our country's state of affairs 10 or more years down the road. This period will be looked upon by historians as the saddest time in our history: a once-great country behaving so selfishly and with such short-term interests that they sold their children's futures away with barely any debate.
The biggest cop-out in Washington is the presidential commission. It rarely accomplishes anything. Yet our situation is so bad that another bipartisan commission may be our best bet. The commission should include both corporatists and populists. As much of a cop-out as this is, we are not prepared to begin debating real solutions (which will involve some pain). Shining a light back on the problem may be all we can accomplish today. We should start.
The problem is we have no adults in the room to make hard decisions. Adjustments could be made to soften the blow (cut spending), but dishonest, evil politicians seem intent on burning the whole damned house to the ground.
It is the INTENTIONAL destruction of Capitalism and America.
I could fix this in one day if I was president. I would declare the USA broke and we would stop paying our interest payments and debt. This would cause no one, and no country to ever loan any money to the USA. I would also cancel the Federal spending due to lack of funds. So we would have to start over and live within our abilities because no more living off debt. Yes some people would be hurt, same as the coming bankruptcy. But my plan would teach everyone to never loan any money to the USA. So we would suffer once and not allow the political class to continue destroying the country.
That effort would be dead in the water before it hit the water. The American people love Joe Biden!
Early honeymoon: Biden enjoys 60% approval rating in AP poll — even higher on handling of pandemic!
Associated Press, CNN Mar 5, 2021 Updated 4 min ago
Then you become a bidness partner with them
Most of our debt is on the books of the federal reserve. Maybe a third overseas and the rest by individuals and pension companies. First order of business should be to abolish the SS debt about 10t and pay benefits out of general funds. If nothing else it removes the interest payment sham off the budget. Next up for anyone on a g pension under 65, cut it in half and remove the inflation index adjustment for all. Next up get the budget balanced. First step some kind of flat tax with zero credits. If the budget is 6t we need 6t. Set the rate accordingly. Lastly execute anyone coming up with a new spending program.
There’s life after bankruptcy. You can recover just fine from bankruptcy. We’re facing much worse and the government is actively facilitating it.
I listen to him all the time but see Billy Bob Thornton’s face
Real US debt is closer to 160 trillion.
What is our country’s total Revenue, excluding Social Security that is running a deficit, divided by our total debt?
What would happen if we had inflation and had to pay 10% interest rate on our debt?
Exactly. Being tied to a few financial heads, has anyone noticed the huge, historic silver and gold rush occurring. Last year , the US imported 55 billion in gold and silver to meet the demand. 2021 figures show 27 billion imported to meet demand....guess who is buying tons of PM’s? The big money, they see where we are going. The Suntrust executive I know has been buying $100-220,000 at a whack when he can take delivery. It leaves little for us small guys...Apmex, JM Bullion, Scottsdale, Gainesville coins, all getting 30 percent over spot and it takes 2-3 weeks to “ process orders”. Comex March deliveries have smashed all known records. The gold rush is historic.
$28 Trillion in Debt... $30 Trillion with the Dem stimulus bill divided by 330 million people = $85,000 per person
If we divide $30 Trillion Debts by 160 million working Americans we get $188,000 Outstanding Debt per person working.
$30 Trillion at 10% interest is $3 Trillion in Interest
Total Non-Social Security USA Revenue for 2019 was $2.3 Trillion (federal government collected $3.5 trillion in revenue with $1.2 Trillion in Social Security and Medicare Taxes)
$2.3 Trillion in total revenue divided by $30 Trillion in Debt = 7.666%
OUCH, if interest rates on our National Debt reach 7.666% it takes 100% of our revenue just to pay the interest on the debt
We get a patriot with balls in the White House who starts collecting from the free world for us keeping them safe from communism. That should put us in the black about 110 trillion. Kuwait still owes us. As does Saudi Arabia. Kanada. Etc. etc
Nothing of the sort has ever come to pass in the intervening decades. Now as I approach retirement, it appears my wife and I stand to collect back close to $100K a year in Social Security benefits alone and I could easily pull out same amount from our 401(k)'s without affecting the principal (based on a 4% annual withdrawal).
It would just be my luck to have everything collapse on me just as I enter my "golden years" after carefully saving and planning everything out - but, as you say, we've been hearing these doom and gloom predictions for DECADES!
Just give me 20 good years in retirement and I'll have no reason to complain.
An article V convention would have us end up like Zimbabwe IF WE ARE LUCKY!
It would be the end of the Bill of Rights for starters and go down hill from there.
The is a great little book called The Dicators Handbook that talks about debt.
Loans are used to pay off the inner circle to keep them loyal. Debt is never repaid, since that will cut off the flow of money to the inner circle. Eventually, you default, old boss gets the ax, and the cycle starts again.
So the national Debt will never be repaid, since it would hurt the elite. Note, what happens beyond them is not their issue.
If America were a married couple attending debt counseling, we’re way past the point of the debt counselor saying “Maybe you should consider eating out less often.” In fact we’re past the point of suggesting a Ramen-based diet. We’re at the point of “Uhh, how do you two feel about scavenging in dumpsters for the next couple years?”
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