The United States currently has a national debt of $31 trillion and it's running out of options to both pay it back and get it extended...
The debt has been increasing every year since the mid 2000s, but really kicked into gear with the 2008 financial crisis and took another significant leg-up with the chosen government lockdown response to the covid-19 pandemic.
The issue of debt has become a political bargaining tool - with whichever party controls the senate demanding policy change in exchange for agreeing to raise the national debt limit, which has happened dozens of times over the last several decade.
But now things really do seem to be at their limit. The U.S. government doesn't currently have sufficient funds to manage its existing debt and is trying to hold on until a possible debt ceiling increase in a couple of months by basically printing new assets.
They are seriously considering minting billions of dollars worth of Platinum coins and selling these ATM.
The problem is that the Republicans are probably going to demand tax cuts to let Biden increase the debt ceiling again this time around, but if that happens it means less government revenue and less capacity to pay off an even higher debt.
And so the only way the government can keep up payments could be by cutting public spending on things such as social security, increasing inequality in America even more!
That means a downgrading of the U.S. economy in the international rankings and higher interest rates on debt, making it even harder to pay it off, looks like a death spiral to me.
And if America doesn't pay up on the debt it is owed, well that means whichever institution bought the bonds or whatever debt-assets they have issued over the years is going to lose out, which could well mean a global recession.
And it's not just the U.S. in this situation... the U.K.'s debt has taken a similar trajectory over the past 30 years, so that's one country in the same boat.... and there aren't many more left with economies sufficiently large to soak up a global recession caused by the possible collapse of the world's largest economy.
Surely at some point... I mean how much further can we take this... a debt of $30 trillion represents years of a country not living within its means, and the figure is so astronomically large it makes the U.S. look like a non-credible economic entity.
I know there are arguments that the U.S. can just go on printing money forever, but come on: rampant inflation, surging debt, stagnant productivity, banks collapsing, things are looking very collapsy ATM!
