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Pittsburg, Kansas | FalcoFog said it in one of his posts and your post has it in slight different wording, but one of the exceptionally important tennets of the system continuing to work as it is is the statement "as long as government can continue to sell debt".
This is 100% true. It worked for post war Germany, it worked for Venezuela, it is working for the EU, it will work for the US. Till it stops working. And those of us warning about the situation see signs of it working starting to falter. How long it takes to falter is anyons guess.
A formula does not cease to be a good formula or an incorrect formula just because the answer portion of the formula is within some acceptable level.
a*2=b is just as valid formula when a=1 and b=3 as it is when a=1000 and b=3000. When a country does many, many, many, many stupid monetary things a=1000. Venezuela is a 1000. The US is a=1. It does not mean the formula is in error just because we have set an arbitrary value of b=500 is ok. It just means as we increase "a" (stupid monetary things) it is going to take longer to get to an unaceptable "b" if you do fewer stupid things.
The math is the same in either situation. For a long long time it is math. Then when the problem goes exponential, it at some point quits being so much about math and more about psychology. Once confidence is lost, game over.
If I am lucky, it may not happen in my lifetime. But the math does not lie. Now a person can take the optimist outlook and say "well so far, so good, so everything must be ok. No need to concern myself". Most Venezuelans probably took that positive outlook. The current system will work till it quits working. But exponents have a tendency to accelerate.
There are lots of signs soverign debt of many nations is on shaky ground. The current worldwide situation actually makes our leper colony financial system look better than most. That likely will make it last longer than it otherwise would.
But the math and the formula does not change. Nor does the psychological behavior of people in a panic.
We can avoid a desperate outcome. But not by exponentially increasing debt because debt in our monetary system IS our money supply and increasing debt exponentially is increasing the money supply exponentially.
You can't get something for nothing. If the government deficit spends they are taking money away from the citizenry. Either throuh taxation or money debasement, one or the other (or both). If you are ok with government taking over ever more of the economy and reducing living standards for most of the population while enriching the connected, then party on. We have a front row seat first hand experience of how that is currently working in our own country. The really bad stuff aka Venezuela comes way later.
John
Edited by John Burns 1/21/2017 09:55
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huge jump in US national debt
