The U.S. May Finally Breach the Debt Ceiling. Here’s Why That Would Be Bad
nytimes.com
nytimes.com
By IMF definition the US is in an economic death spiral that will become irreversible by 2028, meaning all of our loan payments will go to only the interest and not the principal, putting the US on track to insolvency by 2042.
We can't do any more quantitative easing because we can't print more money. That road we've been kicking the can down since Bush was in office, hell since Nixon took us off the gold standard making overspending for political points and cronyism and criminal profiteering possible -- we're at the end of it. Hence the Fed raising interest rates, forcing the people who took all that money to move it out of the stock market and into bonds so the government can keep it's head above water and make loan payments.
Yes, it's all fake virtual money that can be written down. But not without completely disrupting civilization by requiring The People to follow one set of rules and laws, and it's Elitist rulers to follow another.
A balanced budget amendment is required, as is strict control and regulation of social security and medicare so they cannot be used as slush funds. On top of that, MASSIVE spending and entitlement cuts -- MASSIVE austerity for everyone is required to give us even a chance of solving the problems. That's almost what we are doing now. It'll get worse because there's no path to it getting better. This is the point where historically there's a war. Hence all the ramp ups in military spending and growth by the US, Japan and China at the very least.
This is also why the government tries to persuade people away from auditing the Fed, as it would be the nail in the coffin to the ongoing crime that has been perpetrated for the past 110 years: unchecked government spending would be impossible without the money printer at the Fed, and would collapse the military industrial complex.
But it’s not. The fed is regularly audited in the usual sense by independent third parties.
https://oig.federalreserve.gov/reports/board-financial-state....
Additionally, every security owned by the Fed, up to the detail of the identifying CUSIP number, is also available online.
Treasury prints paper dollars which are sold to 'federal reserve' for pennies per sheet.
Treasury mints coins which are sold to 'federal reserve' at face value.
Banks create debt money via fractional reserve lending for cars and houses and whatever. When those loans are repaid that debt money is extinguished.
No, most money is created by commercial banks [1].
If the article starts this way talking about having a _balanced budget_ it's hard to trust anything else they say. Borrowing ever larger sums of money from foreign creditors will be the fall of the republic, not fiscal responsibility.
It’s just performative. Republicans had full control of all 3 branches of government in trump’s first term and all they did was increase the debt with unfunded tax cuts.
The republic is teetering because of this disfunction and hypocrisy, legislators who have no interest in actually legislating and finding compromises to solve our problems.
I mean it's a pretty obvious analogy: raising the debt limit is like opening a new credit card. If you keep doing that you get more and more in the red. If you keep your current credit limit and instead stop buying so much junk you can reduce your debt.
> It’s just performative. Republicans had full control of all 3 branches of government in trump’s first term and all they did was increase the debt with unfunded tax cuts.
I 100% agree with you. It's performative by the majority of Republicans. There are some who I feel truly believe a balanced budget is the #1 issue, though, and I'm rooting for them. Unfunded tax cuts (TCJA) are _worse_ than the status quo of just bumping the limit; that made my blood boil.
The majority of them are performative and the rest of them are just chaos monkeys in it for the power this gives them, no matter the cost to the country.
Debt in any case is not our biggest most urgent problem, it may not be a problem at all in fact.