Not alarmist at all. The can was kicked in 08. We are in a debt spiral. Government spending is a component of GDP, % of GDP is NOT the context. We are insolvent. 210+ trillion in unfunded liabilities! And about 70% of spending is mandatory.

The USD as world reserve currency is the biggest sword the US has.

At current rates or higher we just piss off every country as they trade in eurodollars. They have started the process and will move off USD unless we get back to a favorable rate for their debt loads.

With our debt load, it's either lower rates and continue to print and inflation (traditional and/or more asset bubbles). Or elevate rates and boost our interest expense and suppress the economy while fighting inflation until entities quit buying our debt and we lose significant power. And then, we still need our money printer and more inflation occurs.

As for me, I'm going with keeping recent "elevated" rates so big banks can scoop up smaller ones in short term and inflation has some check, then back to lower rates after election. I'll hold inflation hedging assets indefinitely.

US is screwed financially. Still better than most economies, but still screwed. Unfunded liabilities, AI, wage gap, education and housing costs, populism, political divide, geopolitical battles. There is no thesis that is great for the US unfortunately. It's best pitch is other countries are just as screwed or more.

There is no way out of the debt load. All solutions require printing like crazy. Or defaulting but you cannot give up the world reserve currency and the fallout would be catastrophic.

There is one way. US government can mint print any coin denomination they like. If US Mint print 10T usd coin for just special occasion and hand it over to Feds, all is good. I am waiting for this crazy idea to happen.

That was a gimmick that made the rounds to get around a debt ceiling. It doesn't escape the debt spiral the US is in.

It used to be calculated as total debt as a percentage of GDP (as opposed to interest payments) and there were concerns it shouldn't go above 100%, otherwise we'd get stagflation like Japan. Now the new goalpost is interest payments as a percentage of GDP.

https://fred.stlouisfed.org/series/GFDGDPA188S

I think this is the first year in history that the interest payment was greater than the amount we spend on defense and we have exceeded WWII spending as a percentage of GDP in 2020 and on.

https://www.cbsnews.com/news/federal-debt-interest-payments-...

Of course more government spending is a cause of inflation too, which hasn't been very comfortable lately.

https://smartasset.com/financial-advisor/how-increased-gover...

It might be alarmist, it might not, we don't really know where the point of collapse is in regard to debt; we're in unprecedented territory.

Also, a substantial portion of that $1T is money that the government owes to itself. For example, the Fed purchased a large amount when it was doing QE.

It seems silly to count money that moves from one pocket to another within the Federal government.

By that logic it should be fine if the government borrows $999999T (or any other massive number) from itself.

From an interest payment perspective that would be just fine. From a money supply perspective not so good, but that's not what this article is about.

> the government owes to itself. For example, the Fed purchased

Fed and government are separate entities. That debt can't disappear because "we owe to our-self".

Whenever I see a story with a large scary number with zero context, I assume it's agenda-driven bullshit designed to deceive.

For example, in NYC there were 386 homicides last year, more than one per day! What a hazardous hellhole!

But the in population context (per 100,000) shows that NYC is one of the safest US cities big or small.

And in historical context (compared with the prior year or with decades ago), and you'll see it's not only very safe, it's safer than it used to be.

Why as a percent of GDP and not as a percent of tax revenue?

Both can be useful. GDP numbers can give you an idea of how difficult or easy it would be to raise the necessary tax revenue if push comes to shove.

US government collected about 4.4T. Out of that 25% went to paying JUST interest. Do you think this is not alarming? Massive amount of USA manufacturing now gone or on life support. Boeing? Tesla? The 10T spent in Afghan supposed to be ROI with the lithium mines there. Gone. Solyndra? Gone. Or how about Ukraine? Gone. Apple? Sales tanked 19% in China. Now we wait for Huawei 2nm next year. Then 2026 Taiwan gone. Possibly destruction of pacific carrier fleets as well with 100K drones swarm then. Look at gold prices. Used to be suppressed because of USA has secret paper gold traders for Feds and Treasury. As long as no physical deliveries and "trust me bro of Fort Knox", paper gold is just like USD, easily printed as needed. That loopholes closed recently because of massive Chinese physical gold deliveries from UK to China 100+ tons annually. This really spooked American Treasury. USA is on last leg now similar to last day of Rome just that instead of centuries, we will see that happen for USA within 10 years time. The only good thing is likely USA will split into multiple smaller countries as what happened to John Titor timeline or turn into Byzantium like western Rome. Worst, it will just be Great Britain into just Britain like scenario.