How long until US default?

[alarmclock]

esmith – you make a good point, thanks.

with apologies to robert frost:

Some say the US will end in inflation;
Some say in deflation.
From what I’ve tasted of desire
I hold with those who favor inflation.
But if it had to perish twice
I think I know enough of hate
To know that for destruction deflation
Is also great
And would suffice.

[bsrsharma]

If you stick some numbers:

Total national debt = 11 Trillion

@5% APR, Payments = 550 Billion per year

Seems Repayable at present.

But, Past 2011, the pressure of Social security+Medicare will stress the budget.

My guess about likely scenarios:
1. Social security tax rate may be extended over all income
2. Social security & medicare payments may be means tested
3. Capital gains rate may be increased (towards income tax rate)
4. Some sort of customs/excise tax may be placed on imports to placate protectionist interests.

[bsrsharma]

If you stick some numbers:

Total national debt = 11 Trillion

@5% APR, Payments = 550 Billion per year

Seems Repayable at present.

But, Past 2011, the pressure of Social security+Medicare will stress the budget.

My guess about likely scenarios:
1. Social security tax rate may be extended over all income
2. Social security & medicare payments may be means tested
3. Capital gains rate may be increased (towards income tax rate)
4. Some sort of customs/excise tax may be placed on imports to placate protectionist interests.

[bsrsharma]

If you stick some numbers:

Total national debt = 11 Trillion

@5% APR, Payments = 550 Billion per year

Seems Repayable at present.

But, Past 2011, the pressure of Social security+Medicare will stress the budget.

My guess about likely scenarios:
1. Social security tax rate may be extended over all income
2. Social security & medicare payments may be means tested
3. Capital gains rate may be increased (towards income tax rate)
4. Some sort of customs/excise tax may be placed on imports to placate protectionist interests.

[bsrsharma]

If you stick some numbers:

Total national debt = 11 Trillion

@5% APR, Payments = 550 Billion per year

Seems Repayable at present.

But, Past 2011, the pressure of Social security+Medicare will stress the budget.

My guess about likely scenarios:
1. Social security tax rate may be extended over all income
2. Social security & medicare payments may be means tested
3. Capital gains rate may be increased (towards income tax rate)
4. Some sort of customs/excise tax may be placed on imports to placate protectionist interests.

[bsrsharma]

If you stick some numbers:

Total national debt = 11 Trillion

@5% APR, Payments = 550 Billion per year

Seems Repayable at present.

But, Past 2011, the pressure of Social security+Medicare will stress the budget.

My guess about likely scenarios:
1. Social security tax rate may be extended over all income
2. Social security & medicare payments may be means tested
3. Capital gains rate may be increased (towards income tax rate)
4. Some sort of customs/excise tax may be placed on imports to placate protectionist interests.

[cr]

To avoid default the US will fire up the printing presses. My guess is the Fed and Treasury are intertwined to provide as much money as needed to keep the world believing the broke system isn’t actually broken.

So whether it comes from the Treasury or Fed, it’s still going to be made up money.

The bigger fear is if other countries holding our treasuries devaule their own currency to inflate the value of their US$ denominated holdings, or worse they tire of our shenanigans and cash them out for another country’s debt to “invest” in, and the dollar loses it’s place at the world’s reserve currency.

[cr]

To avoid default the US will fire up the printing presses. My guess is the Fed and Treasury are intertwined to provide as much money as needed to keep the world believing the broke system isn’t actually broken.

So whether it comes from the Treasury or Fed, it’s still going to be made up money.

The bigger fear is if other countries holding our treasuries devaule their own currency to inflate the value of their US$ denominated holdings, or worse they tire of our shenanigans and cash them out for another country’s debt to “invest” in, and the dollar loses it’s place at the world’s reserve currency.

[cr]

To avoid default the US will fire up the printing presses. My guess is the Fed and Treasury are intertwined to provide as much money as needed to keep the world believing the broke system isn’t actually broken.

So whether it comes from the Treasury or Fed, it’s still going to be made up money.

The bigger fear is if other countries holding our treasuries devaule their own currency to inflate the value of their US$ denominated holdings, or worse they tire of our shenanigans and cash them out for another country’s debt to “invest” in, and the dollar loses it’s place at the world’s reserve currency.

[cr]

To avoid default the US will fire up the printing presses. My guess is the Fed and Treasury are intertwined to provide as much money as needed to keep the world believing the broke system isn’t actually broken.

So whether it comes from the Treasury or Fed, it’s still going to be made up money.

The bigger fear is if other countries holding our treasuries devaule their own currency to inflate the value of their US$ denominated holdings, or worse they tire of our shenanigans and cash them out for another country’s debt to “invest” in, and the dollar loses it’s place at the world’s reserve currency.

[cr]

To avoid default the US will fire up the printing presses. My guess is the Fed and Treasury are intertwined to provide as much money as needed to keep the world believing the broke system isn’t actually broken.

So whether it comes from the Treasury or Fed, it’s still going to be made up money.

The bigger fear is if other countries holding our treasuries devaule their own currency to inflate the value of their US$ denominated holdings, or worse they tire of our shenanigans and cash them out for another country’s debt to “invest” in, and the dollar loses it’s place at the world’s reserve currency.

[pedrocon]

Interesting comments especially the one about tariffs, and the other foreign currencies devaluing their currencies to keep up with the US devaluation.
I think we can all agree that no matter the government will not cut costs. They will either increase revenue by tariff ( which would be an interesting contradiction since we’ve been pushing free trade for decades) or they will inflate. My guess is we are about to become more like India (BIG, unstable, weak currency, powerful country, but politically/economically volatile).

I could see there being a small brain drain here as people move away for opportunities elsewhere.

[pedrocon]

Interesting comments especially the one about tariffs, and the other foreign currencies devaluing their currencies to keep up with the US devaluation.
I think we can all agree that no matter the government will not cut costs. They will either increase revenue by tariff ( which would be an interesting contradiction since we’ve been pushing free trade for decades) or they will inflate. My guess is we are about to become more like India (BIG, unstable, weak currency, powerful country, but politically/economically volatile).

I could see there being a small brain drain here as people move away for opportunities elsewhere.

[pedrocon]

Interesting comments especially the one about tariffs, and the other foreign currencies devaluing their currencies to keep up with the US devaluation.
I think we can all agree that no matter the government will not cut costs. They will either increase revenue by tariff ( which would be an interesting contradiction since we’ve been pushing free trade for decades) or they will inflate. My guess is we are about to become more like India (BIG, unstable, weak currency, powerful country, but politically/economically volatile).

I could see there being a small brain drain here as people move away for opportunities elsewhere.

[pedrocon]

Interesting comments especially the one about tariffs, and the other foreign currencies devaluing their currencies to keep up with the US devaluation.
I think we can all agree that no matter the government will not cut costs. They will either increase revenue by tariff ( which would be an interesting contradiction since we’ve been pushing free trade for decades) or they will inflate. My guess is we are about to become more like India (BIG, unstable, weak currency, powerful country, but politically/economically volatile).

I could see there being a small brain drain here as people move away for opportunities elsewhere.

[Author]

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