The Ticking Time Bomb That Will Go Off Sooner Than You Think

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by Robert Carbery

Something has been going on this past month that has as usual been lost in the shuffle of other mainstream media prioritized news. Lost in the hysteria around the Vegas shooting (of which we still have many unanswered questions) and Harvey Weinstein and Mueller indicting Manafort and the wacky World Series is the rapid rate of growth of the U.S. national debt during the early months of the Trump administration.
 
In October alone, America’s debt has soared by almost a quarter of a trillion dollars. This is on top of already well over $20 trillion. A monumental story. Lost again to other such less significant stories since we always kick the can down the road. Well, eventually we are going to run out of road. We are bankrupt and no one seems to care.
 
And we are doubling down.
 
Historic levels of debt for the world’s largest economy matters little to the masses. They are too busy being divided by the useless R v. D debate in DC. Both parties’ politicians are getting rich. The public will be left with the bill. The consequences will come. The party will end.
 
The U.S. government spends all of the tax revenue it takes in on Social Security, Medicare, and Interest on the Debt. Sound sustainable?
 
Add in our ridiculous spending on national defense and the lopsided budget and you have more than a mess on your hands. You have a calamity.
 
Spending cuts are impossible these days because once you start a government program it cannot be stopped. And tax increases doesn’t make things much better either.
 
We’ve tried the top tax individual rate at 92% in 1953 and 28% by 1988. The corporate tax rate has similarly fluctuated from 34% to 53% in the post-World War II years, getting as low as 15%. Yet, total tax revenue as a percentage of GDP has budged little. This reveals how our unsustainable trajectory is a cost problem. We simply spend far too much, way more than we take in. We can not afford it and things that cannot continue will invariably end.
 
There is no happy ending to this conflict. There is only disaster and and decline for the world’s greatest nation. If we do not make drastic changes now, we will trigger a financial crisis in the future.  
 
Simon Black, an international investor, entrepreneur, and founder of Sovereign Man recently pointed out that the “Social Security Board of Trustees (which includes the US Treasury Secretary), estimates that its key trust funds will be depleted in 2034, at which point the program will be fully dependent on government tax revenue to pay monthly benefits.” This will come sooner than you think. Less than 17 years is not that far. But if we continue on this path, those projections could be updated and the date we run out could come even sooner.
 
More people need to pay attention to this real ticking time bomb. This is a greater threat to us than Russia or North Korea or Iran or terrorism. This is a real crisis in the making. And we are barreling straight toward it.
 
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4 thoughts on “The Ticking Time Bomb That Will Go Off Sooner Than You Think

  1. The american people have been screaming about the debt since 1970’s, when that moron Nixon took us off the gold standard, thus creating an environment of true fiat money, thus the government could instantly print money to pay it’s debt without fear that it would ever be forced to pay it back! Suddenly the political elites realized debt was unimportant because they could pass it forever down to future generations and never themselves be held responsible, thus the inevitable that the american dollar will collapse!

  2. The debt and budget do not go hand in hand, never have as near as I can tell. Can both be fixed, yes, but not with our messed up governmental mindset. Example, Congress writes a law, but the pork added to the law are in essence, bribes to those in Congress who will not support said law unless they “get something” out of the deal.
    Social Security – Mine was revoked (working career account balance was over $177K – my contribution, now $0.00), why you ask?
    The story goes back to 1978 when I turned 18, from 1975-1980 registering for Selective Service was not a requirement (I joined the military at 17, went active right after turning 18 and stayed active until 1987). Within the Selective Service Act, there is mention that failure to register can result in the loss of Federal benefits. There were many “Males” who joined the military from 78-80 who most likely did not register, who have fallen through the cracks. I know several others, who worked all their lives only to wake up one day to discover that they were not employable (another side effect, back in the old days we could just show our DD-214 to employers to prove we were “legal” to work in the U.S.), you see, in present day applying for a job is done online, hence our working legality is flagged and we are rejected post haste. Employers are required to verify “Males” have registered for Selective Service, hence if the male is not in the sss.gov database, male is not legal to work in the USA.
    True the amount of Social Security benefits they revoke or have revoked is but a spit in the ocean, the amount they give to illegals and refugees far exceeds the amount revoked.

  3. Oh please! As long as there is base line budgeting we will never get out of debt. The only good thing is that if America explodes on it’s debt all the rest will too thus causing a WW default. Thus we all start from scratch again:-)

  4. Absolute failure … will occur when US Gov… can not just pay the debt off …but can not pay even the % on the debt … that will occur when debt load exceeds … 3 trillion or total revenues …
    if all in is 200 trillion each percent is 1 trillion % on the debt >>>@ 5% = 100,000,000,000 IOD trillion this is normalization … so at 8% it will be impossible to pay even the IOD
    IOD = interest on the Debt
    Here is my difination for total failure … when the revenures can pay the IOD … revenues are 17% of GDP …no matter what tax rate is …
    that number to today is $18,569,100,000,000 …and 17% of that is …
    =3,156,747,000,000 …3 trillion
    IOD will have 2 numbers …first is the common national debt …the one you see in the charts and the big sign … that number is say 20 trillion
    the other number is the estemated total obligations …the “real debt” …all in debt … all in debt is 200 trillion
    So what we wnat to caculate when and if the IOD will exceed 3 trillion …well here what we do …
    By 2020 the estimate for the little Nat Debt.. is $474,000,000,000 which is estimaed to be 9.7% of budget …but it will be 97% …of the total budget on the “all in” debt
    2020 is the end of it all … prepare now …rember this only IOD …not what we pay back only the interest …we must pay back.
    @ .5% interst is a simple .005 * $20,000,000,000,000 = 10,000,000,000
    @ 1% = $20,000,000,000
    @ 2% = 40,000,000,000
    @ 4% = 80,000,000,000
    >>>@ 5% = 100,000,000,000 IOD trillion this is normalization
    …the end of future …at that point even fastest commuters on earth can not calculate it …for even fastest computer cycles… need some small increment of time …
    @ .5% interst is a simple .005 * $20,000,000,000,000 = 10,000,000,000
    @ 1% = $20,000,000,000
    @ 2% = 40,000,000,000
    @ 4% = 80,000,000,000
    >>>@ 5% = 100,000,000,000 IOD trillion this is normalization <<<<<
    But if we count "all in" debt owed more like $200,000,000,000,000
    and if that is true … at 5% (normalization) = 10*100,000,000,000
    or 1 Trillion on the ( interest on debt )
    almost a 1/3 of revenues paid to interst… this is not the deficit …this IOD whch adds to the defict wich adds to the debt … get it we can never have a noral economy again … untill this is paid down to a "normal" level …
    and when IOD does reach 1/3 we are well and truly done … totally cooked
    By the eve of the French revolution in 1788, the national debt of France was so large that the government had to spend 50% of tax revenue just to pay interest to its lenders.
    So the spending continued. In 1788, in fact, the French government overspent its tax revenue by 20%, increasing the debt even more.
    That’s why the national debt exceeds $20 trillion today. And including its pension shortfalls, the government estimates its total ‘net worth’ to be NEGATIVE $65 trillion.
    From the Roman Empire to the French in 1788, history tells us that the world’s dominant superpower almost invariably spends itself into decline, ignoring the consequences along the way.
    But at a certain point, a rational person has to take note of such obvious and overwhelming data, and take some basic steps to reduce your exposure to the consequences.

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