2 ms·

we've never done anything on this scale. the debt ceiling will be raised to 11.3 trillion, meaning it will hit 12 trillion by 2011 and 20 trillion by 2020. and

we've never done anything on this scale. the debt ceiling will be raised to 11.3 trillion, meaning it will hit 12 trillion by 2011 and 20 trillion by 2020. and that isn't counting the forty or so trillion in unfunded entitlements like ss and medicare for the boomers. adding so much more debt at a time when we need to be taking near-fascistic measures to be reducing it, likely will result in the US repudiating the dollar by 2025. its over. no nation can issue this much debt and survive. expect a global ultra-depression when this implodes, punctuated by a major war.

dfranke 18y ago
The situation isn't too dire yet. As you can see here: http://en.wikipedia.org/wiki/List_of_public_debt http://en.wikipedia.org/wiki/List_of_public_debt, as a percentage of GDP, US public debt is still comparable to or below many other first-world countries. But you're absolutely right about unfunded entitlements. If nothing is done, we'll be soon be on par with Zimbabwe, and it's uncertain whether anything non-horrific can be done. Those unfunded entitlements are not just an accounting problem -- they're real material wealth that people are counting on for their retirement that doesn't exist. The obvious solution is to raise the retirement age, but you can only raise it so far before people are too old to be physically capable of work. If any tightrope does exist between hyperinflation and octogenarians starving in the streets, I question whether the political will exists to walk it.
- mattchew 18y ago
  The Wikipedia article is outdated for the US. Public debt was spiking even before the new bailout package (.5 trillion?) and the costs of FNM/FRE liabilities. While entitlements are definitely a long run problem, I think we have a more immediate one: the willingness of other countries to keep trusting US govt debt. It doesn't matter what our debt/GDP ratio is if our creditors think we'll debase our way out of what we owe. We should know the answer to that one within a year. We live in interesting times.
- nazgulnarsil 18y ago
  willingness to walk it has to come from knowledge that failure will result in BOTH.
  - dfranke 18y ago
    Agreed, but I don't envy the politician who tries to point that out while fighting for re-election.

dfranke 18y ago

The situation isn't too dire yet. As you can see here: http://en.wikipedia.org/wiki/List_of_public_debt http://en.wikipedia.org/wiki/List_of_public_debt, as a percentage of GDP, US public debt is still comparable to or below many other first-world countries. But you're absolutely right about unfunded entitlements. If nothing is done, we'll be soon be on par with Zimbabwe, and it's uncertain whether anything non-horrific can be done. Those unfunded entitlements are not just an accounting problem -- they're real material wealth that people are counting on for their retirement that doesn't exist. The obvious solution is to raise the retirement age, but you can only raise it so far before people are too old to be physically capable of work. If any tightrope does exist between hyperinflation and octogenarians starving in the streets, I question whether the political will exists to walk it.

mattchew 18y ago
The Wikipedia article is outdated for the US. Public debt was spiking even before the new bailout package (.5 trillion?) and the costs of FNM/FRE liabilities. While entitlements are definitely a long run problem, I think we have a more immediate one: the willingness of other countries to keep trusting US govt debt. It doesn't matter what our debt/GDP ratio is if our creditors think we'll debase our way out of what we owe. We should know the answer to that one within a year. We live in interesting times.
nazgulnarsil 18y ago
willingness to walk it has to come from knowledge that failure will result in BOTH.
- dfranke 18y ago
  Agreed, but I don't envy the politician who tries to point that out while fighting for re-election.