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The Most Foreseeable Disaster in U.S. History
Chronicles ^ | March 2024 | Mark C. Brennan

Posted on 03/11/2024 7:51:29 AM PDT by Angelino97

take a look at the recent Penn Wharton Budget Model (PWBM) publication showing how the United States will soon immolate itself and the rest of the world under its mountain of unpayable debt... the PWBM wastes no time gaslighting its audience. Its conclusion regarding America’s staggering $34 trillion national debt is equal parts terrifying, inevitable, and obvious:

"Under current policy, the United States has about 20 years for corrective action, after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt."

...The United States’ precarious balance sheet could lead to disaster even sooner than the rosy 20-year scenario. Financial markets may start to doubt the federal government’s unsustainable “debt dynamics,” which need only a little economic weakness before they start to unravel.

The PWBM reminds us that as government debt expands, it “crowds out” private capital formation, the lifeblood of economic activity. Crowding out then leads to lower GDP growth and a smaller tax base, which factor into a government’s creditworthiness. Japan’s national debt exceeds 200 percent of its GDP today. But Japan’s high household savings rate—23.7 percent last November—funds its outsized borrowings. The United States’ 3.7 percent household savings rate shows where American consumers’ priorities lie.

Those who dare to read beyond the PWBM’s summary will be punished for their curiosity. The 200 percent debt-to-GDP ratio will only persist as an “outer bound using various favorable assumptions.” The “more plausible value,” 175 percent debt-to-GDP, isn’t even all that plausible according to the PWBM, as that lower ratio bakes in the financial markets’ wing-and-a-prayer hope that the government “will eventually implement an efficient closure rule” to shrink the debt. The previously mentioned unraveling can occur at even lower debt-to-GDP ratios (today’s 120 percent anyone?) as soon as financial markets stop dreaming.

(Excerpt) Read more at chroniclesmagazine.org ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: debt; default; economy
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To: Trumpisourlastchance
The people responsible have one reaction(to the serfs)on their way to casketville....

...SUCKERS!(LOL)

41 posted on 03/11/2024 8:53:58 AM PDT by RckyRaCoCo (Time to throw them out of the Temple...again)
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To: Angelino97

“we cut off entitlements”

What’s with the Polish writing on my insulin?


42 posted on 03/11/2024 8:56:20 AM PDT by Brian Griffin
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To: Cincinnatus.45-70

Yep, they figure they have 19 years of grifting and pork remaining.


43 posted on 03/11/2024 8:57:40 AM PDT by Night Hides Not (Remember the Alamo! Remember Goliad! Remember Gonzales! Come and Take It!)
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To: Angelino97

Me too. I know a guy. Brilliant. Columbia Business School endowed prof. Was Trump’s assistant Comptroller of the Currency.

He specializes in banks, finance, & panics. Every time I ask him about his he’s nonchalant. “I can see no contingency in which the U.S. government defaults. The Fed will just print more money.” I can never pin him down to what happens if the Fed can’t cover the amount of debt that is out there.

I don’t see what is so horrible about a default, though 85% of US debt is HOME-OWNED. It seems to me that ultimately we are left with one of three options:
1) Inflation so much worse than now that it comes close to Weimar levels.
2) Default that primarily affects pension funds and big investors (i.e, a LOT of ordinary retirees.
3) Start NOW raising SS age, increasing lower end “contributions,” and cutting Medicare, the biggest drivers of the debt. Course, this won’t happen and Trump has made it clear it’s off the table. The reason ought to be obvious: this is a single-agenda item for a president-—but it has to be someone with a Reaganesque mandate and who isn’t going to spend much of his presidency trying to clean out the snake dens of the FBI/CIA and fix the economy.


44 posted on 03/11/2024 8:58:39 AM PDT by LS
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To: Lurker

“spending like Medicare, Medicaid”

The Germans collect mandatory rebates on drug expenditures.

If the drug budget is 20 billion Euros and 29 billion Euros is spent, rebate invoices go out for 9 billion Euros.


45 posted on 03/11/2024 8:59:59 AM PDT by Brian Griffin
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To: Angelino97

That terrorists would use commercial airliners to attack.

Or ships. Or boats.


46 posted on 03/11/2024 9:00:22 AM PDT by linMcHlp
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To: Brian Griffin

Good for them.

If you like the way the German government does things I suggest you move there.

L


47 posted on 03/11/2024 9:03:17 AM PDT by Lurker ( Peaceful coexistence with the Left is not possible. Stop pretending that it is.)
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To: Angelino97

Dear Landlord:

Section 8 will have expenditure recapture lien requirement.

No payments will be made to you by the government until the lien is recorded at your expense.

Secretary of HUD


48 posted on 03/11/2024 9:06:15 AM PDT by Brian Griffin
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To: LS

“cutting Medicare”

Part A - hospital

Hospitals are basically clean rooms with medical equipment and nurses.

For a man to work 40 years it should be affordable for him to pay for 40 manhours of nursing care for each of several operations.

man: 80,000 manhours
nurses: 120 manhours


49 posted on 03/11/2024 9:16:51 AM PDT by Brian Griffin
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To: LS

“cutting Medicare”

Part B:

20% of bill as co-pay
25% of rest by premiums

leaves 60% of billing amount

federal income tax at ~40% marginal rate on billing amount

Only 20% of Part B billing amounts have to be raised from third parties.


50 posted on 03/11/2024 9:20:57 AM PDT by Brian Griffin
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To: ProtectOurFreedom

The problem for America is Washington. Our only hope is to get enough Rand Paul type folks elected to Congress, the Line Item Veto, and zero based budgeting. The Federal Government needs to shrink by about 40% for starters. The US has suffered a number of slow downs and recessions since WW2, while Washington has suffered none.


51 posted on 03/11/2024 9:27:00 AM PDT by Rlsau1
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To: jeffersondem

Along those lines, my guess is the government wouldn’t actually default. Instead it would use the threat of default as a lever to force various money grabs, probably heavy new taxes at first, and then direct confiscation of wealth if it got to that point.


52 posted on 03/11/2024 10:06:54 AM PDT by Yardstick
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To: Angelino97

OK folks, do your part to help prop up the government while it sells your children into debt slavery by continuing to buy government debt! /s


53 posted on 03/11/2024 10:21:12 AM PDT by EnderWiggin1970
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To: Rlsau1
The Federal Government needs to shrink by about 40% for starters.

That would disproportionately impact women and minorities.

Most of the workers at my local post office are black women, and I live in a very white area.

54 posted on 03/11/2024 10:47:46 AM PDT by Angelino97
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To: Angelino97

Hmm. What a coincidence that most of the criminal politicians burying all of us in this debt will be dead in less than 20 years.


55 posted on 03/11/2024 10:48:59 AM PDT by Newtoidaho (All I ask of living is to have no chains on me.)
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To: Angelino97

“or spending cuts”

This is humorous.


56 posted on 03/11/2024 10:51:46 AM PDT by RFEngineer
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To: circlecity

The debt is increasing exponentially. We are currently adding a trillion dollars to the debt every 100 days. And that figure is increasing.

+++++++++++

Oh, he feels the piston scraping
Steam breaking on his brow
Old Charlie stole the handle
And the train it won’t stop going
Oh no way to slow down


57 posted on 03/11/2024 10:52:28 AM PDT by mund1011 (We can ignore reality, but we cannot ignore the consequences of ignoring reality)
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To: Angelino97
Oh good grief! You see what you choose to see and no more.

To name only one thing: the wall would be completed now if Trump had not had the election stolen, stopping most of the millions pouring in. Thereby stoping most of the cost, crime and death associated with them.

Keep pushing for those Dems, pal!

58 posted on 03/11/2024 10:55:21 AM PDT by citizen (Put all LBQTwhatever programming on a new subscription service: PERV-TThose look good)
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To: Angelino97

Protect your family. Buy Gold and Bitcoin. As much as possible.


59 posted on 03/11/2024 10:55:50 AM PDT by montag813
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To: circlecity
I don’t buy the 20 year figure. The debt is increasing exponentially. We are currently adding a trillion dollars to the debt every 100 days. And that figure is increasing.
While I certainly agree on the sentiment, I don't buy the $1T increase every 100 days.

Each quarter there are financial instruments to be paid out and others to be bought, so the amount added to the ND varies.

The bad news is, as you suggested, the costs associated with those transactions will only keep increasing.

I don't buy that we have 20 years more to party, either.

60 posted on 03/11/2024 11:03:04 AM PDT by citizen (Put all LBQTwhatever programming on a new subscription service: PERV-TThose look good)
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