Have we finally reached the end of the road? When it comes to the economy, most of us focus on short-term cycles. In recent years there have been times when the economy has been growing and there have been times when the economy has been shrinking, but all of those short-term fluctuations have happened in the context of a long-term trend of debt-fueled “growth.” We have been relentlessly stealing from the future in order to make the present more pleasant, and most of us pretend that the piper will never have to be paid. But of course the truth is that a day of reckoning is fast approaching, and that day of reckoning is going to be immensely painful.
Earlier today, I came across a tweet by End Wokeness that really does a great job of pointing out the harsh reality of what we are facing…
US national debt, 1960: $286 billion
US national debt, 2023: $31.4 trillion
Are our roads better?
Are our streets safer?
How about healthcare?
Is it easier to raise a family?
Did we improve our schools?
If not, then what the hell did they do with that $31,124,000,000,000?
I can actually answer that last question.
They bought time.
By kicking the can down the road over and over again, they have been able to delay the severe economic consequences that myself and so many others have been warning about all these years.
About two-thirds of our national debt has been accumulated since Barack Obama first entered the White House.
Over the past 15 years, our politicians in Washington have been on an absolutely insane debt binge. Adding more than 20 trillion dollars to the national debt has allowed them to extend the party for a lot longer than many of us originally anticipated, but now the jig is up.
Our currency is rapidly losing value, inflation is wildly out of control, the Federal Reserve has been forced to dramatically hike interest rates, and economic conditions are steadily deteriorating all around us.
Thankfully, there are still some politicians in Washington who want to get federal borrowing under control, and they are going to try to block the debt ceiling agreement from getting through Congress.
And there are some that are even suggesting that Kevin McCarthy should be removed from his position…
On a House Freedom Caucus call Monday night, Rep. Ken Buck, R-Colo., floated using the motion to vacate, a rule that would allow any member of Congress to force a vote to remove the speaker, two sources familiar with the call told NBC News. Buck, speaking toward the end of the call, referred to it as the “elephant in the room,” one source said.
After House Freedom Caucus Chairman Scott Perry, R-Pa., suggested it might be too early for such a drastic threat, Rep. Paul Gosar, R-Ariz., proposed using the threat to force McCarthy to allow members to amend the bill on the House floor, under an “open rule” that could stall the bill’s passage. Perry responded that they would discuss the issue more when members return to Washington after the long weekend.
Ultimately, I don’t think they will be successful.
I think that there will be enough votes from the Democrats to pass the debt ceiling agreement, and I believe that Kevin McCarthy will remain the Speaker of the House.
But if I am wrong, things will get quite “interesting” very rapidly.
Of course it isn’t just the federal government that is drowning in debt.
State and local governments have taken on mountains of debt, corporate debt has surged to levels that we have never seen before, and U.S. consumers are currently more than 17 trillion dollars in debt.
High-interest debt is particularly destructive, and it is being reported that Americans now owe more than a trillion dollars on their credit cards…
America’s credit card balance has passed $1 trillion, or it’s about to, depending on whom you ask.
The average interest rate on a new card is 24 percent, the highest figure since the Reaganomics era.
This really is a form of predatory lending, and most of the large financial institutions are doing it now.
Don’t fall into their trap.
Because once you get into a situation where you cannot pay off the balance every month, you can end up paying back far, far more than you originally borrowed…
A typical American household now carries $10,000 in credit card debt, by one estimate, another record.
If that doesn’t sound like a lot of debt, try paying it off. At $250 per month, with 24 percent interest, you’ll be making payments until 2030, and you’ll spend a total of $20,318, twice what you owed. And that assumes you never use the card again.
What we are facing is an entire society that is completely and utterly saturated with debt.
From the very top to the very bottom, we have pushed things just about as far as they can go, and now the wheels are starting to come off.
In order for the party to continue, our debt levels have to continue to expand, and the Uniparty in Washington understands this very well.
But this madness cannot go on forever.
We are like an addict who needs larger doses over time in order to achieve the same buzz.
That can work for a while, but eventually the addict overdoses and ends up dead.
Sadly, the end of our story is rapidly approaching as well. The debt mega-cycle that we are currently experiencing has reached a terminal phase, and there is going to be immense pain as the system implodes all around us.
I really do hope that the abominable debt ceiling agreement that they are trying to push through Congress right now does get defeated.
But no matter what happens in Washington, this debt mega-cycle is coming to an end, and that has very serious implications for each one of us.
**By Michael Snyder