You Have Ten Years or Less

I don’t have much confidence in economic forecasts, but here is one anyway:

Here’s why economists are so worried about soaring US debt levels (

Technically, the government could print money to pay off its dues, but that would result in hyperinflation as the money supply skyrockets.

Robust economic growth can make debt more sustainable, but the debt is growing way faster than the economy — the national debt balance rose 86% over the last decade, while GDP grew by 63%, according to Fed data.

Economists are uncertain of when exactly the national debt will become a true problem for the US. If the pace of borrowing doesn’t slow, Rubin anticipates a crisis of some sort materializing within the next decade.

“It starts slowly and then it accelerates rapidly. Right now I don’t think anything is imminent. I would say we have 10 years or less to fix this problem. I think that may be the optimistic scenario,” Rubin said.

I question how he, or anyone can put a number on this. Perhaps by comparison to other nations with similar problems but that doesn’t take into account things like the U.S. Dollar being a reserve currency, the state of our technology development. After all, where is the case history where there was no need to physically print the money, the government could just change a few 1’s and 0’s in a computer file someplace.

It was about 15 years ago that Chet and I started talking about the imminent risk of U.S. hyperinflation. And it still hasn’t happened. How many times does one get to cry “wolf” before no one listens to you any more?

Still, ten years or less? You and I might be able to build our underground bunkers by then.


5 thoughts on “You Have Ten Years or Less

  1. My back of the envelope calculation was between 2 and 4 presidential terms.

    At that point, federal interest payments will equal federal revenues. Doesn’t matter what the actual dollar figure is, hyperinflated or not. To pay the tax collectors means necessarily taking on more debt just to pay them.

    The only thing underpinning the dollar is the “full faith and credit” of the US Federal Government. And that faith and credit comes from its ability to extract value out of the American economy and whoever else they can scrape with fees. But I think they’re finding they have optimized the Laffer curve and anything they do will reduce revenues, and as circumstances change, I don’t think they know how to make anything better. If they did, they certainly haven’t demonstrated it.

  2. What cannot continue will not…. and the debt we are racking up means that eventually the whole thing MUST collapse. But you might be amazed at how long the criminals in power will be able to keep the farce running. They aren’t about to let things collapse as long as they can still find treasure to loot. And looting the treasury is always the last act of those in power before things blow up. The current crop of monsters is exceptionally greedy. They want it ALL. And will stop at nothing to get it.

  3. Ten years might prove a bit optimistic; were it me, I’d start moving dirt at full speed immediately after the spring thaw, if for no other reason than there’s no way to predict the amount or type of damage that will occur during the steepening slope preceding the crash, nor any reasonable method of predicting the rate of slope increase (aka, Hemingway’s “gradually then suddenly” phrasing); in temperature, severe negative biological effects occur long before reaching 0 Kelvin, and severe societal damage, perhaps even total destruction, occurs well before reaching Zero Economy.

    While there are exceptions, humans generally, require a period of learning, acclimatization and adaptation to become proficient, which is one reason sky divers are required to complete five static line jumps before being entrusted with totally manual ripcord management.

    I suspect there are neither training classes nor a “static line procedure” of any significant length embedded in economic collapse, although the Obama/Biden management practices we’ve been experiencing could be considered “introductory training and practice.”

  4. 10 years? Well maybe if you were just looking at rosy best case numbers.
    But as Francisco points out. All the other side effects that happen along the way have to be factored.
    At a trillion dollars every 100 days. Thats 3.5 trillion a year. At 3% interest is 105 billion just in interest payments on the increase every year.
    You get paid how much an hour? How many man-hours to work for just that small part of what we owe?
    And that’s not what your doing now. That’s the annual increase on top of what your doing now.
    And since government is based on increasing everything, every year. Were just getting started.
    But 10 years? That would be nice. I could live out a few more of my golden years, then take that long walk in my pajamas in a goodly blizzard.
    It’s a nice dream.

    • And I forgot, all that money flows right back around into the price of everything you buy.
      Making your man-hour labor unit worth less. And sucking the value of your savings dry at the same time.
      Gosh, isn’t economics fun?
      We shouldn’t think of congress as passing a budget. We should consider it a new draconian work schedule.
      “From now on the tally of bricks will not being decreased. And you will gather your own straw to make them.”
      By decree, Egyptian pharaoh.

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