Saturday, December 13, 2014

Paying Down the U.S. Debt is Now Basically an Impossibility | Mathematical Model & Options

This is part of a sobering post and video from Zero Hedge
A mathematical model ... shows that, even with absurd assumptions (7%+ GDP growth for years at a time, low interest rates, etc.), it is simply not feasible for the US government to ‘grow’ its way out [of the current debt].  
Default has become the only option. And that could mean a number of things.
  • They could default on their creditors (other governments like China who loaned money to the US government). But this would spark a global financial and banking crisis. 
  • They could default on the Federal Reserve, which owns trillions of dollars of US debt. But this would create an epic currency crisis for the US dollar.
  • They could also default on their obligations to their citizens—primarily to future beneficiaries of Social Security (who collectively own trillions of dollars of US debt).
  • Or they could choose to default on their obligations to every human being alive who holds US dollars… and engineer rampant inflation.
None of these is a good option. And simply put, the US government has reached a point of no return. ...