Which is that the INTEREST payment on our National Debt could be our largest line item in the budget:
The Fed could be facing a nightmare scenario. “There is a much more worrisome scenario, however, in which US inflation remains stubbornly high, perhaps because the combination of continued tight labor markets and elevated living costs fuel persistent rapid wage growth. Such a wage-price spiral would pose a difficult conflict between the policy needs of the US economy and those of the rest of the world. Further increases in interest rates would be essential to bring down US inflation and inflation expectations. But at a time when many of our trading partners were mired in recession, further policy tightening could create grave problems abroad: substantial job losses, widespread defaults and disruptions in international financial markets.”
Left unsaid: The federal government can’t afford prolonged tightening because of increased interest payments on $31 or so trillion in debt.
And with compounding, it will just get worse and worse. And with our state of our hyper-partisanship, what other programs will get squeezed?
And that really IS the problem. This is the most watched but ignored crisis of our national politics for the last three decades – and we keep electing people that keep spitting out our dollars with their votes as if there was an unending source of such.
It won’t be a crisis recognized until it bites US in our collective fannies when dollars mean pennies. Our national check-kiting will be finished. The days of the Federal Government being the machine exists only to fulfill the phrase “Taxation is Theft” to take from one to give to another for practically any reason (which is to say, no reason at all except POLITICS!) will end.
And we will have only ourselves to blame. Including both the Republicans and Democrats that we here in NH have sent to DC. The Democrats just did what we knew that they’d do. The Republicans just lied to us as to their Party affiliations (their actions/votes spoke louder than their campaign promises).
