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https://x.com/WallStreetSilv/status/1825672872699772994
This debt overhang is what lead to the “lost decade” (now decades) in Japan and left them without the ability to use fiscal stimulus. Hence the “creative” central bank maneuvers such as quantitative easing, that arguably made things worse. Add to that the yen carry trade to prop up the one thing, exports, that was keeping the economy alive, and economic stagnation followed. Japan also lost its tech edge to South Korea, and manufacturing to China.
Even now, Japan’s debt to GDP ratio is over 200%. It’s latest deficit to GDP was about 6%. Of concern, the US deficit to GDP ratio is at right around 6%, and it’s debt to GDP is around 123%.
None of this is good, and without significant spending cuts, entitlements will explode, resulting in high interest rates and a potential default.
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You’ve hit the nail on the head. Because politicians have known that entitlements were coming to this debacle for three generations, and did little to fix it, we’re on the brink of disaster.
The only workable solutions will result in ruinous inflation, not enough money for seniors, too much tax for working people and (quite frankly) you’re going to have to turn everyone in the cash economy into taxpayers.
I read a silly, stupid article the other day that claimed illegals are already paying social security. Maybe. None of the ones I pay claim social security. They certainly haven’t asked for a 1099.
We’ll have to raise FICA and Medicare taxes by 1/3rd, boost the social security and medicare recipient years by 2-5 years at different levels, turn illegals into taxpaying citizens, reduce the social security payment amounts and print money to cover the shortfall. Happily, we’re reshoring lots of jobs, so we have a start.
On the other hand, a Dem administration will likely make more stupid decisions, kill the growth, increase the deficit and screw things up. Per usual.
Audaces fortuna iuvat
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If people aren’t working, Social Security won’t be funded / taxes need to go up significantly to fund current obligations.
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Want to reduce CPI? Add cocaine to the basket of goods.
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https://www.businessinsider.com/men-not-working-unemployment-job-market-economy-housing-social-security-2024-6 If people aren’t working, Social Security won’t be funded / taxes need to go up significantly to fund current obligations.
Saw that. But you can’t force them to go back to work, and candidly…working conditions are pretty miserable, and there’s a lot of low-priced competition from immigrants, legal and otherwise.
Audaces fortuna iuvat
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