The result of our foolishness is predictable - economic ruin. It is impossible to predict when this will occur. It is also difficult to predict how - will it be abrupt and sudden or will it fall apart over a period of time?
My best guess is that our politicians will honor their promises. In order to honor these promises, they will continue to borrow from future generations. When they can’t borrow any more, they will crank up the printing press until a government check won’t buy a few days worth of groceries. When this happens there will be civil unrest and economic collapse. They will try everything possible to keep the system afloat including price controls, confiscation of private wealth and property, oppressive business taxes (see Chicago), import taxes, federalizing pensions and investment funds, and any other foolish thing they can do. All of their actions only prolong the inevitable economic collapse and anarchy. The only thing that could save us would be incredible economic growth with severe spending cuts. Both growth and cuts are highly unlikely.
I hope I am wrong, but I hold very little hope that any President or national figure can turn this around given how partisan we are. People and interest groups are only concerned about themselves and there is little acceptance of shared sacrifice. This is why austerity measures won’t work. We could elect Reagan on his best day with a GOP congress and they would not cut even half of what is necessary for the government to get back on a path to fiscal stability. They would be voted out of office the next election for whomever promised to reverse the cuts and spend more. We have no stomach for pain. We have no problem passing our debts onto our children and future generations.
At this point, our whole nation resembles a gigantic ponzi scheme. Those at the top - our grandparents and boomers will suffer the least. Like any ponzi scheme that robs the new to pay for the old it only works as long as fools invest in it. Printing money only works as long as people believe a dollar is worth something.
Just my guess and it’s worth no more than yours.
I appreciate the replies and I believe everything each one of you said which is why I asked the question. No one answered it, though.