Posted on 04/19/2024 9:08:59 PM PDT by HogsBreath
In 1797, a year after revolutionary France abolished paper money following a disastrous inflationary experiment, U.S. President John Adams delivered a warning on government debt.
“The consequences arising from the continual accumulation of public debts in other countries ought to admonish us to be careful to prevent their growth in our own,” Adams told Congress.
(Excerpt) Read more at washingtonexaminer.com ...
It’s just a way to confiscate the wealth of the masses, to make them dependent upon the state. It’s diabolical.
I can't see any alternative. Many other nations have done this, from the 1920s until now. Governments, ultimately, do not pay their debts.
But the US is a superpower. It would cause much turmoil, and the US dollar will no longer be the world's reserve currency.
DUH!
Compound interest is the friend of savers and the nemesis of debtors....whether individual or collective.
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>> Is it reasonable to foresee ‘hair-cuts’ on peoples savings?
Of course! Inflation will take what the government doesn’t rob.
>> Nationalization of IRAs?
They have talked about it. Wealth taxes too.
>> Bank holidays and bank closings?
Not sure about that; the big banks are vital for the State to exercise its financial power. Regional and local banks may suffer though.
Here’s another one for you: what will happen to local (i.e. non-federal) governments when inflation goes through the roof and/or the fedgov begins their thieving? States and locales don’t have a printing press and can’t commandeer the citizens’ wealth. Most state and local government can’t raise taxes beyond incrementally without voter approval. But they CAN take your suddenly inflated real estate if you can’t pay your property tax...
fasten seat belts for rough landing...
Write downs and/or defaults are never happening.
The alternative and certain future is spending freezes, tax hikes and inflation.
No reasonable substitute for the dollar even exists despite the insanity.
The winner of the dog show is still a dog.
>> It’s diabolical
Sure is!
Bunch of white rural ragemongers whose life savings and assets have been incenerated... forced off their property... not much to live for... still have plenty of guns and ammo though.
What could go wrong??!?
Maybe Speaker Johnson can fix this?
The present USA has the same Debt/GDP ratio (125%) as the country had at the end of WWII.
Of course, at the end of the WWII, Federal Govt sharply reduced its expenditures. At the same time, the Federal Reserve kept interest rates low, so inflation ate away at the nominal debt. At the same time, by 1956, Eisenhower had balanced the Federal budget. The national debt finally dropped to about 25% of GDP in 1980 - 35 years later
Its now very different from 1956. In 2024, we have not fought a world war, the world is slipping out of America’s control, Washington DC is controlled by neo-marxists and kleptocrats, and Americans are hooked on welfare and government spending of all forms. There will be no fiscal discipline whatsoever.
The likelihood is for very high inflation, until some sort of jarring social/political either starts us on the road to discipline, or finishes off the Republic
Fox, Hannity, Gingrich, et al. refuse to mention the Debt and the corrosive effects of the debt when discussing all their holier than thou spending.
Interest on the federal debt is now so immense that it's consuming 40% of all personal income taxes. The largest source of revenue for the federal government is increasingly being devoted to just servicing the debt, not even paying it down.
The problem is getting worse daily . . .
US national debt tracker for April 12, 2024: See what American taxpayers (you) owe in real time
Thanks to a combination of high inflation, rising interest rates and unrelenting growth in the national debt, interest payments are expected to triple from nearly $475 billion in fiscal year 2022 to a stunning $1.4 trillion in 2032.
Given that the left refuses to cut spending on wasteful communist-socialist pogroms and too many politicians overall refuse to cut spending on pork . . .
Some time within the time-span of mid 2027 on up to mid 2029, all of personal income taxes will be paying all of the interest on the national debt. None of personal income taxes, will be paying down the national debt.
With that in mind, along with the bottlenecks, chokepoints, and roadblocks created by government bureaucratic regulations, weighing heavily on what American producers can/might do . . .
That’s interesting, it’s the same with tax revenue as a percent of GDP vs spending as a percent of GDP.
They collect 15-20% of GDP since WWII
for years on end they’ve spent over 25% of GDP.
Also of interest-
In Japan, the interest payments on the national debt account for a significant portion of the budget. As of 2023, these interest payments consume approximately 22% of the Japanese national budget.
We’re nowhere close to that, yet I never read of the certain doom of the honorable Japanese and the Yen.
As long as they have food, history says nothing will go wrong.
If starvation becomes a thing again, everything is in perfect order for violent revolution-or exactly what the Marxists have been shooting for for over 100yrs now.
I'm unable to give a complete answer but, will give below points:
Japanese yen is not the worlds reserve currency.
Only 16% of forex trades are in Japanese Yen vs. 88% for US Dollar - and most of that trade involves Japan itself or its international assets
70% of Japanese debt is monetized by its central bank, and most of the remainder is bought by large Japanese banks and funds. This is a quirk of highly homogenous Japanese society
Japan is still a huge holder of foreign assets (the USA is the opposite). Any defaults will only be within Japan, not to the rest of the world.
So for these reasons, Americans and Europeans generally have zero interest in Japan's financial issues
Because it buys most of the debt, the Japanese Central Bank specifically suppresses yields on Gov. Bonds. Japanese 10 year gov. bond is still only 0.84% (it was <0.5% only a year ago)
japan debt/GDP is indeed huge - 260%, but that's why its central bank MUST suppress interest rates. Its caught in a trap.
It didn't matter until recently, as the EU had negative interest rates and USA itself was close to zero. Now rates have risen elsewhere and the Japanese Yen is slowly crashing - Yen is at 30 years lows
Japan inflation, while reported low by Govt, is nonetheless also at 20 years high
IMHO, Japan's debt crisis is having grave effects on its society - the country is literally depopulating, as young people can't afford and see zero reason to have children.
I appreciate you taking the time.
The carry trade may have been a time saver.
I agree with the end and have posted as much several times.
Japan and it’s importance in the world has been constantly diminishing. It’s sad. As I really believe Japan will be annexed by another country at some point in I’ll go with the next 150yrs.
But hey the Nikkei finally recovered from 1989 recently and they may run a budget surplus shortly!
Where’s Captain Obvious? You don’t have to be a math wizard to see the numbers growing and have predicted this years ago.
Is there any other way to write off 100s of trillions in debt?
At a population of ~333M, it takes 3 dollars from every man, woman, child and alphabet person to collect $1B. It takes $3,000 from each to collect $1T. x35, it takes $105,000 each to collect $35T. Or for each family of four, $420,000. In short, it will never be paid off and there is no intent to pay it off. The debt may increase exponentially until it spirals out of control and essentially becomes worthless.
Inflation acts like a tax on all currency, whether in a savings or checking account, or under your mattress. If a dollar used buy two cans of beans, and now buys one can of beans, the can of beans did not change, the dollar devalued to be worth one can of beans.
https://fiscaldata.treasury.gov/datasets/historical-debt-outstanding/historical-debt-outstanding
9/30/1982 ... $1,142,034,000,000.00
9/28/1990 ... $3,233,313,451,777.25
9/30/1998 ... $5,526,193,008,897.62
9/30/2006 ... $8,506,973,899,215.23
9/30/2014 ... $17,824,071,380,733.82
9/30/2022 ... $30,928,911,613,306.73
9/30/2023 ... $33,167,334,044,723.16
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