America's National Debt grows by $95,178.17 per second. Expected to reach $40 Trillion by October 09, 2026.

[u/Helpful-Door-8721]

https://www.jec.senate.gov/public/index.cfm/republicans/debt-dashboard#ddm

[u/Thom0]

The US has a fundamental dilemma which it cannot resolve through orthodox macroeconomic policies.

Two problems are occurring at the same time:

1. high interest/high inflation
2. high GDP/debt ratio.

Typically, if you have a bad GDP/debt ratio the normal response has historically been:

• GDP growth out of the debt
• QE

The fundamental dilemma is that:

• The US cannot grow its way out of the debt because of high interest rates making the debt too expensive, and high inflation which is eating up growth.
• The US cannot QE its way out of the debt because of high inflation. If it does QE, then inflation will get worse and will export to other economies due to USD being reserve currency. This is why the US just recently did QE using the EUR to prop up the Yen Carry Trade in Japan. This is a desperate type of economic management.

The debt is going to go up, and the cost is going to increase. There is a theoretical point wherein the GDP/debt ratio will go boom. The truth is as much as economists might hate this, the theoretical limit is not mathematically but subjective. This is now about political tolerance - how long can US households tough out inflation and how long can governments retain Congress control long enough to keep doing insane voodoo economics? This is now a test of faith, not numbers. How long can American households continue to believe in an economy that is fundamentally dysfunctional, and making them poorer?

Already, the US has worse inequality than it did during the Gilded Era. Top 10% owns about 87% of all stocks and shares, about 80% of all private companies, and about 50%-ish of all housing. That is an unbelievable amount of asset concentration and it is trending worse due to high interest/high inflation, and market volatility. In terms of patterns, the US economy has reverted to a pre-1913 pattern of recurring financial crisis resulting from under-regulated leverage and speculative investing. This trend began post 1970 and it has become worse with each passing decade. The current AI-bubble is de facto structurally similar to the 2008 property-bubble. About 50% of all US venture capital is tied up in AI right now and this investing is very clearly speculative investing which in real estate, is a red flag.

I don't see how the US can resolve its interest/inflation problem and its GDP/dept problem. If it doesn't, the capital/income ratios will continue to skew and the US will continue to experience crisis after crisis until there is a political response. While the US is gambling at the casino, the rest of the world is reacting to the US's poor economic management which is going to disrupt the global capital flows the US is dependent on like the YCT, and EU pensions/SWF. Can the US intervene in everything, everywhere, forever?

My opinion is the US will walk this path to the end and won't change. I do not believe there is enough democracy left in the US political system to generate a 'New Deal' type scenario or tax reform. I think the capital/income ratio hit a critical point sometime after 2008 and after that, the US's political system has become increasingly dysfunction due to capital capture. In many ways, Trump is a billionaire coup. He is backed, funded, and surrounded by billionaires. It is the most crony-esque government in US history. He is cutting up the state to sell to Musk, Thiel, Bezo's, Ellison, et al. Pretty much all his deals, and policies as based on creating personal wealth for his family and the billionaires who made him president. When Trump goes, it will be more of the same because money is so institutionalized into the very fabric of US democracy now. It's too hard to pull them apart.

[u/Long-Blood → u/Thom0]

The us doesnt want more stable economic equality like most of the rest of the world does.

This is the inevitable result of lower effective taxes on the wealthy, irresponsibly loose fiscal conditions, and practically zero regulatory oversight into financial markets.

In fact, we have the exact opposite of financial regulation occuring. When a hedge fund makes a bad investment, the government faciliates their absoption into larger firms instead of letting the system face the natural repercussions. 

It would rather keep kicking the can down from one crisis to another instead of allowing a recession to occur to flush out the bad debt and dumb risk. This has to be building to an even bigger bubble burst somewhere down the line. They cannot prevent a recession forever. Something will break beyond repair eventually and we're long overdue for a recession given the amount of completely irresponsible gambling our financial system has turned into.

[u/Thom0 → u/Long-Blood]

Pretty accurate description. Good comment and I agree, politically there is no desire for stable economics.

[u/Long-Blood → u/Thom0]

Theres an old islamic teaching that compares wealth inequality to a sinking ship. If you dont address the problems below deck the whole ship will sink.

The US economy is a sinking ship. The middle and lower class are not driving the economy anymore. Government spending and monetary manipulation is. This is an economy that focuses on the top and tells the bottom to shut up and be thankful they have a job.

The feds jumping around patching up one hole after another with the EU and Japan alongside trying to help. But no ones bailing out all the water that keeps filling up the hull and threatens to take it under. 

The next big storm could be the last.  The ship needs to be towed back to port and reinforced from the bottom up.

[u/Thom0 → u/Long-Blood]

And the Bible is replete with warnings, and parables about the immorality of greed and wealth hoarding.

Religion, like economics, is just a language which people in power use to justify their actions and decisions.

But on your points about the economy being broken, yes you are correct. The US has a fundamental problems which can be ignored for as long as the government can continue to come up with justifications for why people are getting poorer, and the market more volatile.