US debt to GDP ratio has been over 120% since 2020.<p>By IMF definition the US is in an economic death spiral that will become irreversible by 2028, meaning all of our loan payments will go to only the interest and not the principal, putting the US on track to insolvency by 2042.<p>We can't do any more quantitative easing because we can't print more money. That road we've been kicking the can down since Bush was in office, hell since Nixon took us off the gold standard making overspending for political points and cronyism and criminal profiteering possible -- we're at the end of it. Hence the Fed raising interest rates, forcing the people who took all that money to move it out of the stock market and into bonds so the government can keep it's head above water and make loan payments.<p>Yes, it's all fake virtual money that can be written down. But not without completely disrupting civilization by requiring The People to follow one set of rules and laws, and it's Elitist rulers to follow another.<p>A balanced budget amendment is required, as is strict control and regulation of social security and medicare so they cannot be used as slush funds. On top of that, MASSIVE spending and entitlement cuts -- MASSIVE austerity for everyone is required to give us even a chance of solving the problems. That's almost what we are doing now. It'll get worse because there's no path to it getting better. This is the point where historically there's a war. Hence all the ramp ups in military spending and growth by the US, Japan and China at the very least.
My primitive understanding is that every dollar in circulation is borrowed from the fed and needs to be paid back with interest and that the only source of new dollars is borrowing them from the fed by way of the treasury selling bonds to the fed. If I am not missing anything (I’m guessing I must be) then wouldn’t the only possible outcome be that the nation goes into perpetually greater debt to the fed?
> raising fears that the fragile U.S. economy could be rattled by a calamitous self-inflicted wound<p>If the article starts this way talking about having a _balanced budget_ it's hard to trust anything else they say. Borrowing ever larger sums of money from foreign creditors will be the fall of the republic, not fiscal responsibility.
It might interest you to know the FDIC is funded by mandatory payments from commercial banks, not by the government. Your savings account will still be safe in the event of debt failure and prolonged government shutdown.
If you post a paywalled article please have the courtesy to post an archive link or workaround. I wish this was built into HN like it used to be.<p><a href="https://archive.is/B9zT6" rel="nofollow">https://archive.is/B9zT6</a>