(06-16-2017, 10:25 AM)FBT Wrote:

(06-16-2017, 08:28 AM)The Real Marty Wrote: What do you think would happen if we printed money to pay our debts?   We're talking 20 or, maybe by then, 30 or more, trillions of dollars of US government debt.  

That much money printing would devalue the currency and cause inflation.   Inflation would lead people to demand more interest in exchange for buying our debt.   No one is going to buy a bond that pays 2% when inflation is 4%.   So the government will have to offer more interest in order to sell the bonds.   More interest on the bonds means a greater chunk of the federal budget will go to interest, which will make the deficits and the debt much much worse and the result will be the same.   At some point, we will either have completely out of control runaway inflation, or government default, and probably government default anyway. 

We cannot avoid bankruptcy and default by printing money.    It doesn't work.

The only solution is to start NOW to solve this problem.   The longer we wait, the worse it will be.

While you're right that the only way to dig out of this hole is to bite the bullet and cut entitlements, the odds of that happening are non-existent.  There's nobody with the spine to do the right thing who actually has a say in the matter. 

Entitlements are going to gobble up a larger piece of the GDP as we progress as baby boomers continue to hit retirement age, and the number of workers required to just maintain that increases, the country is going to fall deeper into a hole that it can't dig out of (we may already be past that point). 

If you look at the birth rate, there are going to be fewer and fewer people paying into the system to support the ever increasing entitlements.  Anyone who has dared to suggest doing what is best for the country is vilified and attacked as someone who wants to throw grandma over a cliff, starve children, and let people die because they can't get proper medical care.  Fear is a powerful motivator.  What nobody has ever attempted to do is to use the same tactics to show people just how bad things could get if we continue down the current path.

The government has seen record tax revenue in recent years, but the deficit has grown at an even higher rate.  Quantitative easing has propped up the myth that the economy is growing, but now the Federal Reserve is starting to slowly pull back and raise interest to get that money out of the system.  It was great for the stock markets, but the potential of hyper-inflation is a legitimate risk. 

The typical progressive response will be to tax the rich more and not cut entitlements in any way.  We could tax the upper 1% at 100%, and it would barely make a dent in the deficit.

There was an interesting video I saw years ago where they broke down what you would need to do to squeeze enough revenue out of the country just to cover the cost of operating for a year.  It's a bit dated, but all that means is that it doesn't take into account things like the ACA.  Still, it shows you what would be required to just cover our expenses for a year.



As far as the US going bankrupt, I'm not sure how that could happen, although I'm sure it could.  The country holds extensive land and mineral rights assets that could be used to leverage the debt.  It still wouldn't wipe out the deficit, but it would avoid a full-on collapse.

At the end of the day, entitlements are going to be cut.  It has to happen.  But, odds are, it's not going to do so until the nation is literally on the brink.