Debt will be Double the Size of The Economy by 2051
America’s economy is based solely on debt. More and more is diverted to support the debt, the liquidity trap.
IMF will step in then and buy all national assets at rock bottom prices. Those stimulus packages seem to be stimulating only the wealthy and the deficit. The official budget deficit is nothing compared to the hundreds of trillions of digital funny money circulating the planet and burying everyone deeper and deeper in debt.
Debt will be double the size of the economy by 2051. This sheetshow doesn’t have much time left. Debt already is double the size of the economy if the government used accrual basis accounting (GAAP).
Unfunded promises for Social Security, Medicare, Government, and Military pensions dwarf the size of the national debt. That train destined for an economic wreck is accelerating into the crash.
Carry on at this rate by the end of next year $40T is on the cards; make it $50T if Biden goes on with his spending program. The Debt to GDP graph stops at 200% of GDP.
Once we cross that barrier, we are screwed. No country in the history of man has crossed that line and not defaulted. Once we cross 150% of GDP, it is mighty hard to be prosperous and for the general standard of living to go up.
It’s a great metric to show the US is terminally ill, and unlike WWII, we have no manufacturing to work your way out of debt, we have no Roosevelt style, activist government to build infrastructures that benefited the country and provide work for people who needed it, (like the WPA, CCC, TVA, etc.),
The tax rate on the rich was far greater than what it is today, so the wealth was spread out more evenly, and everyone had an investment in working together and benefiting from it. That was why the standard of living during the period between 1946 to 1970 was the best time for Americans ever in their history.
Today, there is no such cohesion in American society, much less tangible accomplishments to show for it. And the American government is stripping its unfunded liabilities (like Social Security, Medicaid, and federal employees’ pension plans) to pay its bills and putting nothing back into the kitty.
America is on its deathbed. Americans really need to get their act together and stop dragging their feet.