I was wondering if it’s past the point of no return which I think it is meaning balanced much less decreasing, and what will be the impacts if the trajectory keeps shooting to the moon.
I think they are referring to paying the rates at higher interest on the debt we already have would be massive which is why it is kept near 0%. I think one thing most can agree on is the day of the savings account is over, in terms of gaining any interest.
Half the population in the first 6 months. 
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I first started getting an interest into politics when Ross Perot was running and he made a big deal about the debt at that time, which as well all know is nothing compared to where it is today. The fact is that if we were actually serious about getting the debt under control there’s no way to do it without some actual pain and sacrifice. Neither side has the guts to tell the truth because politics is all about painting a pretty picture to the ignorant masses. The Left likes to talk about how we can tax and spend our way to prosperity with an open border and free stuff for all. While on the other hand the Right likes to tell everyone how we can grow our way into prosperity.
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I remember the bipartisan commission under Obama on how to reduce the debt if my memory serves me correct it was a democrat and republican and after it was researched by a bipartisan committee they came back and said taxes must be raised and spending must be cut if anything is to be done to stop the trajectory. Needless to say neither side seem to take their advice.
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I did some research and actually Japan’s debt to GDP ratio is much worse than the US (it looks like we are likely in the top five). Their debt to GDP ratio is double ours, so maybe it’s possible we could still deficit spend another 20-30 trillion? 
During my time researching this that is what every author I’ve read has said as well. Now try wining elections to the ignorant masses with that message.
Yep the ‘lost decade’ which was actually 20 years of stagnation which has now been extended to 2021 ‘30 years’ because of covid. Which is why I put stagnation as a possible scenario because of Japan.
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I just googled it Simpson-Bowles “National Commission on Fiscal Responsibility and Reform” 2010.
In 2010 a bipartisan Presidential Commission on deficit reduction, created in 2010 by President Barack Obama to identify "policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run.
Not heard from these guys since.
Simpson Bowles had some workable ideas and some pure “cut spending “ dogma.
In a growing diverse modern country, the government should be getting bigger, along with fulfilling the Founders vision of America. Everybody being equal and equal protection under the law requires a mechanism to ensure that, free markets sure won’t.
The ACA was a step in deficit/debt reduction as Simpson Bowles outlined in “reduce Federal spending on health care” but it’s a kludge that’s been vandalized since it’s inception.
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I agree with Eagle Keeper neither side is going to do squat and keep kicking the can. You can’t win an election being honest, and you sure can’t win one saying folks we are screwed and are going to have to start raising taxes much higher as well as make significant cuts to spending.
What’s the endgame? My opinion it will go on until either A. China outpaces the US economy and the Yuan becomes the defacto dominant currency or B. People lose faith in the dollar and we start losing credit ratings.
Just because inflation hasn’t yet reared its ugly head doesn’t mean it won’t.
Our strongest asset is the dollar strength which both sides seem hell bent on destroying.
My share of the covid relief bill (from which I get $1400) is about $5800.
Even if a person gets a year of extra unemployment bennies at $300/month, he got $5000 for his $5800 share of the bill.
The day of reckoning will come. When it does, it will hit swiftly and devastatingly. The nation is playing Russian roulette with debt.
What is the match that lights the fire, and what does it look like when it starts burning?
How does the debt actually impact our economy after this day of reckoning?
Obama and the GOP congress managed to cut the deficit in half.
Joe Biden won while saying he will raise taxes.
Right now with long term economic growth…even with the pandemic induced recession…still outpacing cost of borrowing, we can still increase our current debt load.
If cost of borrowing starts to rise closer to growth rate (a sign of diminishing return on debt) we will start to have issues.
China at present is nowhere near being able to offer an alternate reserve currency so that is not an issue.
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The other strong asset we have is that our economy and companies are still the envy of the world. Nonetheless, it’s hard to imagine that we can deficit spend forever. We are probably looking at a national debt of 35 trillion dollars by the end of Harris/Biden’s term, and very likely on a trajectory to hit 40 trillion dollars shortly after that. Some here have argued that we can simply tax the rich along with increasing government spending on free healthcare for all, free childcare for all, free college for all and throw the borders open and provide free stuff for all the world who gets here, and also eliminate the deficit.
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If we knew that, we could keep putting out the match before it ignites anything. No different from putting out an unattended candle in your bedroom. But as you know with many house fires, once it starts, it often gets out of hand faster than anyone is prepared for.
The value of our dollar – both domestically and internationally – relies on the faith and credit of the United States government. When that gets lost, the dollar becomes worthless. (Read up on Confederate currency for a quick understanding of that.)
Once the dollar is worthless, people will want something more tangible to trade their goods and services for. Maybe it’s gold/silver. Maybe it’s canned goods or non-perishable food. Or booze. A vendor doesn’t want paper money that the next guy will not accept. He will want something that he knows that either he can consume, or that he can use for trade with the next guy.
What will be the tipping point where people who buy US bonds and notes today will no longer be willing to lend to the US Government? Personally I thought we were going to hit that a long time ago. (Even before the turn of the century.) So don’t look to me for guidance on that threshold. It won’t be when individuals like myself no longer have faith in the USA’s credit. It’ll be when mega-sized players see the limit – players like China and Saudi Arabia, etc. You and I will know when it happened after the fact. And the dollars we hold won’t be worth much more than toilet paper.
What would make the mega players lose faith in the dollar? Wouldn’t that be sentencing themselves to the same fate? IOW, if they lose faith, they cost themselves billions…
And I suppose there would have to be something else to have faith in, which is why everyone is so worried about the Yuan?
Right now there is a constant turn-over of US debt. Bills and bonds and notes come due, and we fund the payment of those mature instruments with sales of new bonds and bills and notes. As long as the obligations are covered by new sales, all is well. (And we pay for new deficit spending with the same sales of bills and bonds and notes.)
You’re right. To some extent those mega-creditors are enslaved to keeping our machinery fed, lest the existing loans they’ve written to us might be defaulted on. And how much of their money is also leveraged by their own debt? Banks lend out money that only has a fraction of it backed by actual assets. They take in $1 in deposits, and can leverage that to lend out $5 in loans. Lots of factors contribute to debt being propped up by debt. If player-A bankrupts against a loan from Player-B, then Player-B may have needed that income to pay the loan he has from player-C. If these are large enough players, it could start a domino effect that can take down the whole structure.
Greece was one of the largest bankruptcy dominoes in recent history. It threatened to take down the while EU. But the EU coughed up hundreds of billions to allow Greece to make its payments. (Not to pay off the loans. Just to make the payments.) Spain and Italy are floundering as well. What if Greece again comes to the EU threatening bankruptcy? How much more can EU cough up? And where does EU get the $$ to bail out Greece? (Borrowing.) But EU has to keep doing that, or else it risks its own crisis.
And if EU fails, it’s so big that it will trigger disaster in other parts of the world. Debt built on debt. Global depression.
That’s just one scenario.
China would be in no position to prop it all up, so turning to the Yuan wouldn’t be an answer. Bitcoin? Good luck with that.
When the monetary systems collapse, then tangible assets would be the only thing left to barter with. If you’re unable to pay your mortgage or your car payment, the creditors will demand the assets behind the loans. (Foreclosure. Repossession.)
In our country, federal debt is only about a quarter of all overall debt out there. We also have municipal debt (county, city, state debt). And Corporate debt. And personal debt. Each component is roughly as large as the other. Debt propped up by debt. It’s all great when the machinery is running smoothly. But a breakdown in one segment could trigger collapse in all the rest.
