Longer Step: Ideas for Justice and Sustainability

This article in National Affairs is too long and meandering, but I love this line: " Paying off bonds with currency that is worth half as much as it used to be is like defaulting on half of the debt ." I've been thinking (and saying) for a long time that we will see inflation, not deflation, because the only way to repay the federal debt is to do it with ever-more-worthless dollars: Print too much money, cause inflation, and repay the debt with devalued dollars. Our government is stealing our future from us, in order to keep the balls in the air a little longer. But it is a sucker's game, and at some point it will become obvious to everyone that the US dollar is worthless. And all who hold their wealth in dollars at that time will suddenly realize they are financially ruined. A sane economic plan would see: a. Progressive income tax rates that raise enough money to fund the entire government's expenditures for the year; b. A vast (VAST) reduction in federal spend...

  I periodically warn how dire the US debt situation is. For something without significant news coverage, it is incredibly dire. Look at the simple math: 1. The US govt is spending $6.8T ($6800 Billion) a year. 2. But its revenues from taxes are only $3.8T. That is a mega-shortfall! 3. So we continue increasing the debt, to fund the difference. That accumulated debt is now larger than our GDP (and the World Bank says that's past a tipping point for disaster). US govt is spending about $600B on interest each year, which is about 8% of its budget, and rising. If interest rates rise, interest payments will go much higher, and will crowd out other spending on stuff most of us want the government to provide, such as Social Security, Medicare, food assistance, police, courts, roads. Imagine a US with only half as much spent on those programs. It is wrong to assume we can just "grow out of it," as the debt is growing faster than economic productivity gains. The fix is to raise t...