E The Big "Ifs" Of The Next Four Years

The central issue that determines the American Experience is how Trump will deal with the federal government's long-standing and rapidly growing bankruptcy that's on the north side of 100 Trillion dollars. 

A trillion isn't just a hundred million or a thousand million, but a million million. A hundred trillion is a figure that fatigues the mind and defies the effort of the brain to define it. But, that is what our representatives in DC have spent...most of it since the turn of the century...to keep the US as boss of the world.

Our government has been digging this debt pit since LBJ's war in Viet Nam along with his War on Poverty at home made it convenient for Nixon tp replace the gold system for responsibly settling international debt, with a fiat system that settled debt with easily printed paper. Everyone loved Nixon's economic engine that had a gas pedal but no brakes...and Congress saw to it that the road ahead had no red lights and no speed limit on spending. So, the US embarked on a "spend as long as they'll accept these paper dollars instead of money."

Hard on the heels of the green light for government spending came the PetroDollar, which let the US bring in everything the world had to offer (including money) in exchange for US IOUs...T-Bills...Treasury notes. 

The US had a good thing going for decades. It was living on an expense account footed by the other 195 nations of the world. And, we've run up an enormous tab...one that our GDP can't begin to pay for. We're in hock so much that we even have to borrow money to pay the interest on the vast sum we owe.

Several years ago the foreigners (foreign nations mostly) stopped loaning the US their money after they began to realize the US could never repay its debt. Realizing they'd never get their money back, they stopped or greatly reduced their purchase of Treasury Notes or Bonds that promised payment with interest.

1 2 3
View single page >> |

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Gary Anderson 2 years ago Contributor's comment

Lenders are drooling to lend to people who cannot pay it back, Bernard. What will be interesting is to actually see if lenders are equipped with guaranteed loans that are toxic. Maybe #Trump wants to cut other things out of the budget in order to prepare for the next housing bubble, a guaranteed one by the Federal Government.

Alexa Graham 2 years ago Member's comment

Here's hoping it doesn't come to that, Gary.