February 22, 2024

No End to Debt

Diane Kimura

We haven’t seen an agenda of this magnitude since LBJ’s Great Society in the 1960s or possibly since FDR’s New Deal in the 1930s. Both were damaging, as the Great Society dramatically expanded the size and scope of government, contributing to the Great Inflation in the 1970s, and the New Deal contributed to a longer and harsher Great Depression.

Just since January 2021, Congress passed the following major spending bills upon request of the Biden administration:

$2 trillion American Rescue Plan Act in March 2021

$1 trillion Infrastructure Investment and Jobs Act in November 2021

$280 billion CHIPS and Science Act in August 2022

$1 trillion Inflation Reduction Act in August 2022

These four bills will add nearly $4.3 trillion to the national debt. But at least another $2.5 trillion will be added to the national debt for student loan forgiveness schemes, SNAP expansions, net interest increases, Ukraine funding, PACT Act, and more.

In total over the past three years, excessive spending will lead to more than $7 trillion added to the national debt, which now totals $34 trillion — a 21 percent increase since 2021.

There seems to be no end to soaring debt with the recent discussions of more taxpayer money to Ukraine, Israel, the border, and the "bipartisan tax deal,” collectively adding at least another $700 billion to the debt over a decade.

Record debts accrued by households and by the federal government (paid by households) are not signs of a robust economy.

This will likely worsen before it improves, as household savings dry up. And with interest rates likely to stay higher for longer because of persistent inflation, debts will crowd out household finances and the federal budget.

The Federal Reserve has monetized much of this increased national debt over the last few years by ballooning its balance sheet from $4 trillion to $9 trillion and back down to a still-bloated $7.6 trillion.

This helps explain persistent inflation, massive misallocation of resources, and costly malinvestments across the economy, keeping the economy afloat yet fragile.

Excessive deficit spending weighs heavily on future generations, saddling them with unsustainable debt levels they have no voice in. Today, everyone owes about $100,000, and taxpayers owe $165,000, toward the national debt. Of course, these amounts don’t include the hundreds of trillions of dollars in unfunded liabilities for the quickly-going-b ankruptwelfare programs of Social Security and Medicare.

Future generations will be on the hook for even more national debt if Bidenomics continues and Congress doesn’t reduce government spending now.

This is why the national debt is the biggest national crisis for America. We’re robbing current and future generations of their hopes and dreams.

(Diane Kimura was a senior Vice President at Merrill Lynch.)

Tim adds:

We have seen this type of thing before and know how it ends - either in default or hyperinflation.
Both will collapse our economy and likely our political ssystem. Hyperinflation collapsed Germany's economy and led to the rise of Hitler. This will be even worse. And default is no better solution; it will roil the entire world economy as nations that lent us money are denied it, and they can't pay their own bills. This means world wide depression on a scale to make the Great Depression look like a minor market correction. I suspect the globalists want that; it will empower their dreams of a New World Order with international socialism and digital currency accessed by implanted computer chips.

Posted by: Timothy Birdnow at 01:34 PM | Comments (2) | Add Comment
Post contains 579 words, total size 4 kb.

1 Not only did this situation, back in the Weimar Republic, lead to Hitler, but if it happens again, there will be no shortage of new Hitlers in the ranks of the Democrat Party. And no shortage of voters to support them.

Posted by: Dana Mathewson at February 22, 2024 11:45 PM (gqxru)

2 Amen Dana. Hitler is everywhere these days, and it ain't Donald Trump.

Posted by: Timothy Birdnow at February 23, 2024 08:27 AM (XIb56)

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