I’ve been writing about the Debt Bomb and the inevitability of its detonation for a long time. So have a lot of other people, so my opinion on the subject is far from novel. I have made an effort to communicate about the phenomenon with clarity appropriate for non-technical readers and with some dark humor.
The basic problem is that, as the US federal government spends more than it receives in tax revenue and borrows the difference, the total amount of debt will become sufficiently high that interest payments will consume too much of the federal budget to be sustainable. The choices will be default (through repudiation of obligations or inflation) or tax increases so extreme that the economy contracts into depression. Either way, the process is self-reinforcing and eventually the economy and the currency must collapse.
There was a time when the government could have taken action to reduce expenditures and increase revenue to a degree necessary to stop the progression to Debt Bomb critical mass. That would have required responsible action and political will, neither of which is possible for the political class and the administrative state. Instead, the government has resorted to gimmicks, misleading accounting, flat out lying and financial repression in the form of artificially depressed interest rates. It is now too late. There is no combination of spending restraint, tax increases and monetary discipline that can defuse the Debt Bomb without creating economic collapse, social disintegration and political chaos.
In 2010, when I quit working full time, I put up a web site where I published essays on, among other subjects, economics. Two essays that relate to the Debt Bomb are [In][De][Re] Flation and Twisting in the Wind. More recently, a chapter (titled “Seminar”) in my political novel Deceit Decline Dissolution, addressed the issue. The most recent example is my recent blog post, Suicide by Confiscation that touches on the issue in a discussion of the demise of the US dollar as the world primary reserve currency.
Members of the political class and its associated elites and fascist partners have stolen enough to insure their survival. Tough luck for the rest of us.
