It’s just play money now. There is a headlong rush by every politician to buy votes with our descendants’ money, and for a long time it was a rational, if horrid and self-serving, plan. But at a certain point the sheer weight of debt will overwhelm even the most vibrant economy, and we reached that point several years ago. Well, unless you accept the sheer, unadulterated stupidity and innumeracy of “Modern Monetary Theory,” which is nothing more than kicking the can down the road, but on a grand scale. Unfortunately some of our elite, brilliant thinkers in government accept that nonsense (Alexandria Donkey-Chompers and Bernie “Champagne Socialist” Sanders come to mind), or simply admit it, because the rest of the yahoos in congress behave as if they believe it wholeheartedly.
In a letter to Sen. Richard Burr (R-NC) and Rep. Virginia Foxx (R-NC), the senior Republicans on the Senate and House education committees, Phillip Swagel, the director of the CBO, estimated that the student loan plan announced by the Biden administration last month will cost about $400 billion but that the estimate was “highly uncertain.” The CBO also estimated that the administration’s decision to extend the pause on loan repayment through the end of the year will cost the government $20 billion.
Oh good, the estimate is “highly uncertain.” For anyone not paying attention, that means that the true cost will be double or triple what was estimated. But it’s just play money now, because there is no way that our country can make a significant dent in our debt, much less pay it off. It is now 150% of GDP, and interest payments on that debt are based on ridiculously low interest rates. And has anyone noticed that those rates are rising and will continue to rise for the foreseeable future?
So what’s the solution? There isn’t one.
Multi-trillion dollar debt is baked into the cake. We are going to find out at what level of debt a sovereign nation collapses under the weight of all of those interest payments. Is it next year or five years or 10 years from now? Who knows…certainly not the geniuses in congress. They will continue to spend and continue to buy votes and continue to lie to their constituents about their fiscal restraint. Hell, my Democrat U.S. representative claims in his campaign ads that he fights to lower taxes!
This is a generational issue, and we will all be dead before it is resolved. Could a fiscal conservative begin to repair the damage? Sure…hypothetically. And easing government control on commerce will certainly help, as we saw with President Trump. But government programs will need to be cut, and cut hard, and at best a president with the desire to do the cutting will have two years before the midterms destroy his majority in congress, and that is assuming that congress will even go along with those cuts!
Don’t hold your breath!