Thanks for the link; that is a good explanation of our problems. The one part that is very scary is the idea that we are monetizing all that debt. I’ve looked at the differences in how the Allies and Germany financed the war effort for WW1; there is a very good discussion in Hew Strachan’s “The First World War.” The British acted as brokers for France, Russia, and their own debt, packaging all of it and selling it as bonds on the New York market. America financed the Allied effort in WW1, and went from the world’s largest debtor to the world’s largest creditor in a few short years. However, the advantage for Britain was that the debt was “externalized;” American banks had an interest in keeping Britain solvent to recoup the loans.
Germany, on the other hand, was frozen out of the American financial market. They had no means of externalizing their war debt, so they internalized and monetized it. With some fairly short-term notes. And there were no foreign lenders to prop them up. The result was the turbo-inflation of the early 1920’s, the beginning of which was apparent as early as 1916.
It appears to me that America is passing from the British model to the German model of debt management. Foreign lenders are looking for a quiet exit out the side door before someone yells “fire!”
That’s a very good analogy. And some pertinent history.