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Important to consider that all the debt was created during a time of relative peace. Now, the U.S. is potentially facing three simultaneous wars having already

Important to consider that all the debt was created during a time of relative peace. Now, the U.S. is potentially facing three simultaneous wars having already increased the debt to these levels. There are changes in international settlement that bypass the dollar. China and Russia and others have been advancing ways around needing to use the U.S. which is already having consequences as some of this would have found its way to funding the rising U.S. deficit. Most likely through buying Government debt and there is a chance we will know when the debt party is over if there is ever a Treasury issuance that cant find a buyer. Given that part of the problem is the system where there is always a buyer of last resort and so much of the debt is money we owe ourselves. Which reduces but does not eliminate the impact of the move away from the dollar. It is clearly unsustainable and certain measures like the reverse repo market show a sort of short term liquidity and it is interesting to compare it to future issuance of debt. The resulting effect then would have to be increased inflation until spending reaches and equilibrium again. Though with all of the potential threats around the world, anything can happen. It just isn't sustainable and there seems to be a collective delusion that it is.

lumost 2y ago
One could take a cynical view that the collective delusion is necessary to sustain increasing wealth inequality. Americans are highly unlikely to accept such inequality if it is accompanied by large reductions in the standard of living. On paper, the debt isn’t a big deal if the government could close out the balance with private assets.
crote 2y ago
It isn't just wars. Infrastructure is crumbling because it's well past replacement age, climate change avoidance and mitigation is going to require massive investments over the next few decades, and the aging population is going to result in a big spending increase while tax income from the working is going to shrink. Even if the US manages to not get involved in yet another expensive overseas war, it's still going to have significant budget issues. Decades of prosperity have been squandered with zero long-term vision, let's hope the backlash from it in the near future won't be too bad.

lumost 2y ago

One could take a cynical view that the collective delusion is necessary to sustain increasing wealth inequality. Americans are highly unlikely to accept such inequality if it is accompanied by large reductions in the standard of living. On paper, the debt isn’t a big deal if the government could close out the balance with private assets.

crote 2y ago

It isn't just wars. Infrastructure is crumbling because it's well past replacement age, climate change avoidance and mitigation is going to require massive investments over the next few decades, and the aging population is going to result in a big spending increase while tax income from the working is going to shrink. Even if the US manages to not get involved in yet another expensive overseas war, it's still going to have significant budget issues. Decades of prosperity have been squandered with zero long-term vision, let's hope the backlash from it in the near future won't be too bad.