The real debt limit isn't how much we'll allow ourselves to borrow, but how much everyone else is willing to lend.
And we hit that a long time back.
More than 30% of our "debt" isn't debt, it's inflation of the money supply. We've long ago hit the limit on how much people are willing to lend to us. So we're inventing money, out of thin air.
And that's the real crisis. This country has a lot of problems. But the existential crisis is in the invented money. The Fed is printing new money like it's worthless paper, to make up for the gap between what we spend and what people are willing to lend.
I had a co-worker just get back from a trip to China. In dollar terms, prices are outrageous. And Chinese merchants are no longer willing to accept dollars. This isn't a good sign.
There's a narrow gap between the Fed printing money like it's worthless paper and the world markets waking up to the fact that it's worthless paper. We're in that gap, now.
This happened to Germany. It happened in Argentina. It happened in Zimbabwe. It's not that it can happen here, it's that it will happen here. if we keep on the path we are on.
We need to reduce federal borrowing by at least 30%, within the next two years, or we're going to face absolute disaster.
“There’s a narrow gap between the Fed printing money like it’s worthless paper and the world markets waking up to the fact that it’s worthless paper. We’re in that gap, now.”
Indeed, and that gap is aided tremendously by the current Greek/European meltdown.
Excellent, informative post.