by Rod Williams, 3/29/2021 - I feel like I am watching a train wreck in slow motion and few seem concerned that a disaster is imminent. We are going down hill like a snowball headed for hell, and no one, or almost no one, cares. The liberal establishment doesn't care. The legacy mainstream media doesn't care. It is not a major topic of conversation on conservative radio talk shows. And, is not a priority of Trump Republicans, which apparently are most Republicans.
The U.S. Treasury Department just released its 2020 Financial Report of the U.S government. This is the report released under the authority of Treasury Secretary Janet L. Yellen. She signs the cover letter. This report paints a gloomy picture. This is what it says, " … The continuous rise of the debt-to-GDP ratio projections based on the assumptions in this Financial Report indicates that current policy is not sustainable. These projections assume that current policy will continue indefinitely, and are, therefore, neither forecasts nor predictions. While the projections are inherently uncertain, it is nevertheless nearly certain that current fiscal policies cannot be sustained indefinitely.”
And, to make it worse, the Government Accounting Office, the non-partisan body that works for Congress says of the report: "... serious financial management weaknesses prevented us from giving the government a “clean opinion” that its financial statements are fairly presented. These weaknesses continue to hinder the federal government from having reliable, useful, and timely financial information to operate effectively and efficiently."
I have not read all 265 pages of the report but the gloom is within the first few pages. It is a shame that this does not grab the public's attention. We can not fix this mess by, as people often assume, just cutting defense spending or cutting foreign aid, or cutting welfare. We certainly can't spend our way out of it and neither can we tax our way out of it. And, I don't think we can tax-cut our way out of it. Unfortunately, we are not trying to stop this runaway train, we are pouring on the steam.
I fear our days as a great nation are behind us. The way I see it we will either have cataclysmic occurrence that leads to massive inflation and then economic collapse or we will manage a decline with a more gradual loss of our standard of living. With American in decline and less able to provide leadership and deterrence, authoritarian regimes will come to dominate and the free world will become more isolated. Whether a cataclysmic event or a more gradual decline, either way we are screwed. I am not so sure we can even put it back together again. We may be past the point of no return. For the first time in our history, you cannot expect your children to have a brighter future than you did.
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| 2020 Financial Report of the U.S. Government |
For more of my views on the coming economic collapse see:
SO, WHY DOES THE NATIONAL DEBT MATTER?
How will the $1.9 Trillion stimulus plan be paid for?
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The situation is indeed dire. Yellen now says "debt doesn't matter" but... "interest payments relative to spending and GDP matters, a bit" (paraphrasing). The goalposts keep moving.
ReplyDeleteTake cheer and comfort, however, that you live in a fiscally sound state (Tennessee) in the USA. This is rare and should be celebrated. Red-and-blue states alike appear to be in various states of collapse. Only a handful, like Tennessee, maintain a surplus per state resident.
The ultimate best thing would be for a peaceful secession of the states / regions with a regional, coordinated defense pact to protect the 'Commons" and eastern and western shores of the former USA. This would be the best thing to do.
Short of that, a devaluation of the currency to gold, along with a purchase by the Fed of the Treasury's gold could be a way to reduce debt to GDP and "normalize" interest rates. This scheme would need real reforms, such a balanced budget amendment, to hold teeth and for outside investors / countries to further buy into the US govt's debt.