U.S. Debt Has No Meaning Anymore (Until It Eventually Does)
Photo by Wikimedia.org | CC BY | Photoshopped
The national debt currently looks like a runaway freight train. Not only is it clocking in at $26.1 trillion at the moment, but it has made the jump of the last few trillion dollars fast.
Really fast.
Wolf Richter summarizes the frenzied ascent in a recent article, appropriately calling it “debt out the wazoo”:
Trillions are now whooshing by at a breath-taking pace. The US gross national debt – the total of all Treasury securities outstanding – jumped by $1 trillion over the past five weeks, from May 4 through June 8, and by $2.5 trillion for the 11 weeks since March 23.
The debt, which had been growing by as much as $1 trillion per year since 2012, suddenly increased 2.5 times as much in a span of only 11 weeks. (See graph below for the spike.)
This dramatic increase comes along with a 5% increase in business debt and a staggering 29% increase in commercial loan debt – but we’ll set that aside for another article.
When you stop and think about how much of an anchor that $26 trillion in debt could represent for the U.S. economy if anything more goes sideways, it’s mind-boggling.
Byron King from Agora Financial sums up the state of the insanity…
“That $26 Trillion of Debt is Utterly Unpayable”
When the average person incurs debt, they pay the debt back plus a certain rate of interest.
Byron King thinks the U.S. is at the point “where even paying interest will be problematic.” Assuming this is true, at minimum, the U.S. could get stuck in a perpetual state of paying just the interest on its mountain of debt.
…click on the above link to read the rest of the article…
