Cut Their Throats

The Gross Federal Debt is now over 100% of GDP. This has only happened once before, during WWII. We outgrew it after WWII because we were the only game in town. Now we’re in peacetime.

Federal tax revenues in the U.S. have stayed at an amazingly constant 18% of GDP in good times and bad, war and peace, low and high inflation; under Republicans, Democrats, tax reforms, tax cuts and tax increases. For 70 years.

It’s not unreasonable to believe that attempts to raise taxes above 20% of GDP will be counter-productive. Tax revenues drop instead of rise.

That’s the limit to the Federal rolling debt scam (i.e., issuing new debt to pay the interest on the old). When interest payments on the Federal debt exceed ~20% of GDP we enter into an unstoppable debt escalation: one that can never be paid down. Mathematically. Default or inflation are the only options.

Today we’re at 2.6%. Whew!

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My Kids’ Future

Heard a scary story the other day. Davies 30:00 

When interest rates rise back to their accustomed levels all tax revenues will soon be needed just to pay the interest on today’s $16 trillion Federal debt. No money left over for Social Security, Defense, Medicare, Medicaid, etc.

This is a direct result of a rolling debt scam run by the Feds: issuing new loans to pay the principle and interest on old loans. Folks in the private sector go to jail for this. The reason these Ponzi schemes are illegal for anyone but the politicians is the music eventually stops and many are left without chairs. That would be your kids and mine.

Here’s how to unravel this mess. For good.

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