Our political class is whistling past the graveyard.
I saw an article the other day...I should post it, talking about how the election did not matter. While I didn’t agree on that broad theme, his point was that the total amount of “mandatory” Federal expenditures already written into law such as social security, medicare, pensions, etc. plus interest on the national debt already exceeded total Federal revenues. So if every dime of discretionary spending, including the military, were cut, we still couldn’t balance the budget. On the other hand, taxes as a percentage of GDP have always been in a fairly tight band. You can raise rates but not raise a lot of revenue (i.e. the Laffer curve).
Bluntly put, they can’t raise taxes enough to cover the deficit, they can’t cut discretionary spending enough to cover the deficit, and they’re unwilling to cut “mandatory” expenditures as it’s viewed as political suicide. The only thing left is to monetize the debt. And that only works for so long before you destroy your currency.
Not good. Not good at all.
Correct. We are in the debt quicksand. No way out, and no one on this planet has the strength to pull the entire country out of that debt trap. What we must do is splinter and let the productive regions go their own way. That would be fair and righteous because the productive regions did not deserve this and they did not cause this.