Quote:
Originally Posted by Raev
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Your points regarding the financial bubble are well taken. But the US national debt is currently $27 trillion. 4% interest would require about $1 trillion in interest per year. Historically it has been impossible for countries to pay off over 100% debt/GDP in real terms. So we have to choose between a deflationary collapse (massive defaults) or inflationary collapse (Venezuela/Weimar Germany style wheelbarrows of printed cash). |
Penn Central 2.0, but on an international scale. As in that case, if we go, we'll drag a lot of other leveraged nations down with us. That reality is helping prop things up longer than might otherwise be the case (if we were Venezuela, we'd have collapsed already). The complete lack of even the pretense of financial responsibility in the federal government over the past twenty years should disgust everyone. Instead it barely receives mention in media since it's no longer a political talking point--both parties are guilty and turn a blind eye. I'd say it's our own fault, but it really isn't. Nobody asked FDR to take the dollar off the gold standard. Nobody asked Nixon to let it free float. The government took that power on its own, people's opinion be damned, and neither party was interested in fixing it because they all have their hands in the pot. It's too late now, we're past the point of recovery, now it's only a question of when the bottom gives out (played skillfully, they might kick that can down the road for many years) and how bad it'll be when it happens.
As I age I gradually accept that governments are much like the ecology of western North America: Either of them have to burn once in awhile to get rid of the rotten rubbish undergrowth and renew themselves.
Danth