3 ms·
The US will likely go down the same path every other country has gone before with an unpayable debt burden: Just inflate it away. Which is bad for people with f
by jcfrei 1y ago
The US will likely go down the same path every other country has gone before with an unpayable debt burden: Just inflate it away. Which is bad for people with fixed-income investments in the US and across the globe, ie. mostly pensioners and people with lots of bonds in their retirement funds. And also likely bad for people with jobs who will face yet another cost of living crisis. If your money is in real estate, equities or gold you should be fine though.
- Retric 1y agoUS’s effective debt burden, debt * (interest rate - inflation)/GDP, isn’t particularly high right now. Unfortunately some politicians seem to have decided unlimited increases in debt are ok. That makes lenders concerned driving up rates. It’s unstable because of how quickly interest rates can change. Right now the 3.375% interest on 37.1T of debt - ~2.7% inflation = an effective interest rate of ~0.675% well below long term GDP growth rate. But that 3.36% is a significant increase over even 1 year ago. If it grows to 5% without higher inflation things spiral fast. https://www.jec.senate.gov/public/vendor/_accounts/JEC-R/debt/Monthly%20Debt%20Update.htmln https://www.jec.senate.gov/public/vendor/_accounts/JEC-R/deb...