Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide. John Adams
British historian Alfred Toynbee studied early civilizations and concluded that civilizations fall when they stop taking the actions needed to continue to function and exist. Why they failed to take the necessary actions didn’t change the outcome – the end of the civilization.
Testing the depth of the water with both feet is an excellent way to win a Darwin Award, hopefully before increasing the level of Stupidity in the gene pool.
As stupid as testing water depth with both feet may be, that level of stupidity pales in comparison to undertaking to find the point at which a nation’s debt causes the nation’s finances and economy to collapse.
Economic theory for centuries held that governments should not run deficits – and until WWII governments did not run deficits.
Well, the Dominion of Newfoundland ran deficits in the 19th century and as a result became a province of Canada rather than an independent dominion [nation].
In the 1930’s renowned British economist John Maynard Keynes, considered the father of modern macroeconomics, Keynesian held that if a deficit was required to preserve the nation, the government should run a deficit.
What governments, politicians, voters and economists conveniently ignore is that Keynesian economics required that government debt incurred to deal with a crisis must be repaid immediately after the crisis ends. Keynes stressed that governments, politicians and voters running failing to repay a nation’s debt after the crisis ended or increasing a nation’s debt by running deficits for convenience and/or comfort would create a debt crisis that would result in financial and economic collapse.
The national survival crisis Keynes was speaking of was Britain’s need to purchase supplies and munitions needed to avoid invasion and conquest by Nazi Germany.
Britain stood against Nazi Germany and served as the base from which to defeat Nazi Germany and free Europe.
The consequence of Britain’s WWII debt resulted in the decline of the British Empire and the rise of the American Hegemony. The object lesson of the cost imposed on Britain in dealing with its national debt motivated world governments to avoid deficits and national debt around the world in the immediate post WWII period.
In the 1970’s South American countries succumbed to the temptation of the convenience of Debt. The result was bailouts from the International Monentary Fund that and severe negative financial and economic consequences that continue to persist 50years later.
The developed countries told themselves that debt would not, could not, have the same negative economic consequences for developed economies/nations. Economists developed theories in support of that desired reality.
The economy is an area, a subject, worth investing thought and consideration in given the effect of the economy on our standard of living and our quality of life. It is a fatal flaw to mistake out thoughts and conclusions about the economy for knowledge. Tao of James
Economics is not a science. Science requires that theories and hypothesis be tested and repeatable. Economic forecasts involve generalities, not specifics and thus cannot be tested.
When ir comes to economic forecasts it is important to hold in mind 1) economist John Kenneth Galbraith noted that economic forecasting existed to make astrological predictions look good; 2) an economist can explain next week why their forecast last week was inaccurate.
The vital point to keep in mind with respect to national debt is there is no way to know the tipping point, the level of debt, where a nation’s interest costs, deficits and total debt triggers doubt/disbelief about the nation being able to repay the loan causing the finances – and thus the economy – of the nation collapse.
.There is no theory or methodology to determine the tipping point; it is a matter of human belief and therefore is driven by numerous undetermined and changing factors and subject to being triggered by perception and changes in those perceptions.
In other words the only way to determine the tipping point is testing the depth of the water with both feet – passing beyond the tipping point and triggering a financial and economic implosion..
The severe negative financial, economic and quality of life consequences that the tipping point represents for a nation AND the fact there is no semi-accurate or semi-reliable way to establish a tipping point makes exercising extreme caution – setting aside what you want to belief and/or want to be true in favor of doubting, questioning and applying the cognitive thinking process – the only rational, responsible behavior.
The ongoing consequences Trump’s Big Beautiful Bomb will inflict year after year on the finances, deficits and national debt on the finances, the economy and the quality of life in the US and the fact that a US financial debt crisis would trigger financial debt crisis’s in other countries makes speaking to the deficits and the total national debt of the US government a survival necessity.
The inability to determine the tipping point does not provide permission for politicians, governments and electorates to take the easy, comfortable way out and recklessly ignore the economic disaster the tipping point represents.
The inability to determine the tipping point demands attention to history, outcomes experienced details and the whys and wherefores of changes.
When Trump’s tariffs crashed the stock market the demand for US treasuries did not go up and the interest rate on US treasuries did not go down as it has historically. Instead the interest rate on US treasuries went up.
Instead of moving into US treasuries, funds moved out of the US. In other words investors no longer consider US treasuries as the safest place to park their funds; investors required higher interest rates to be enticed to loan the US money [buy treasury bonds].
While here are other factors that may have contributed to questions about the safety of funds invested in US treasuries, ignoring the effect ongoing, structural US deficits, the continuing increase of the US national debt and the ballooning percentage of the US budget the interest cost of the debt consumes has on the perception of the safety and value of investments in the US dollar and US treasuries is suicidal willful denial.
In 2024 US debt stood at S35.46 TRILLION and servicing the debt cost $514 Billion. The cost of serving the debt is currently the second largest US budget expenditure and under Trump’s Big Beautiful Bomb [AKA Trump’s Phiscal Poison Pill] will become the largest budget expenditure in 2026.
As US deficits increase total US national debt the increased risk and decreased safety of the US dollar and US treasuries will increase the interest rate needed for the US to borrow funds.
The spiral of increasing debt totals increasing the risk of investing in US treasuries and increasing the interest rate demanded by investors to invest in US treasuries will cause US government finances and economy to implode disastrously.
When the implosion occurs, US debt [treasuries] will be viewed as worthless, leaving the US unable to borrow money except at exorbitant rates, in need of a bailout by the IMF and a third world economy.
Reality does not care what your ideology says is true, what you believe is true or what you want to be true; Reality does not care what we think, it exists separately from us and simply is what it is. Tao of James
With respect to Trump’s Big Beautiful Economic Bomb Republican members of both the House and Senate have made it abundantly clear that, in addition to the ethical bankruptcy of cutting food programs, Medicare and medicate for poor Americans in order to fund Trillions of dollars in tax cuts for the wealthiest Americans, they are so fiscally incompetent and irresponsible they have no hesitation to explode the US debt by multi Trillions of dollars, creating a debt crisis that collapses the US finances US economy of the US, the quality of life life of US citizens and stranding the US in a great depression.
Of course while the democrats have not sought to explode US debt by the multi Trillions of dollars the republicans are in the process of doing, the actions of the democrats make it clear they lack the character, fiscal responsibility or statesmanship to stop running deficits much less reverse the escalating damage deficits and increasing debt cause the US economy.
Still, as culpable as politicians, corporations, wealthy funders and ideologues are for the current deteriorating state of US finances, the US economy and the quality of life of a continuously increasing majority of US citizens, the uncomfortably unpalatable Reality is that it is US citizens themselves who bear ultimately responsible.
Citizens blame politicians for the state of the US government and the effect that government has on life in the US, in particular the affordability and quality of life in the US, while those citizens deny they bear any responsibility for US politics, politicians and government.
Behaviour that ignores the Reality that, when it comes to politics, politicians and government, no level of denial, rationalization or refusal of responsibility will change that, in a democracy citizens, both those who vote and those who do not, choose who they send to Washington DC to represent them and run the government.
Both the US Constitution and the writings of those who drafted the Constitution show clear awareness and concern about the Reality Thomas Jefferson expressed in “The government you elect is the government you deserve“.
Government, politicians and politics being a consequence of the behaviour and choices of citizens is why the US constitution states “the informed consent of the governed” instead of simply referencing ‘the consent of the governed’.
Informed consent requires sufficient information to achieve a full understanding of the implications of what is being consented to in order to be able to make reasoned decisions on issues.
In other words, informed consent requires investing the time and effort required to use the critical thinking process to evaluate the factual circumstances that exist, to evaluate and prioritize the issues, choose the issues to be addressed and the actions required effectively address the issues needing to be addressed.
The behaviours and actions of US citizens in the 2024 federal election demonstrate a failure to invest neither the effort nor the time required to ensure citizens could and would achieve the level of understanding required for informed consent.
The failure to apply the critical thinking process to either the state of affairs that existed in the US on voting day or the issues/challenges the US was facing on voting day was indisputably reflected by:
Citizens voting for a depression, since a depression was required to meet the demand that prices across the board. The failure to recognize that falling prices required a depression resulted in ignoring that addressing affordability required an increase in real wages by reversing the policies that have been eroding wages for working and middle class Americans.
Working and middle class citizens whose quality of life was being squeezed by affordability challenges voted for large tax cuts for the wealthiest citizens, thus voting for the negative economic consequences the tax cuts would have on working and middle class citizens.
Voting for Trump as a successful businessman based on an image created Trump’s appearance on a reality TV game show while ignoring the uninterrupted record of failed and bankrupt businesses that resulted from Trump’s actual, real world business ventures.
Ignoring deficits, the national debt, the interest cost on the debt and the immediate extreme negative consequences the failure to prioritize addressing the debt poses to the finances and economy of the US. Behaviour that ignores British historian Alfred Toynbee conclusion that civilizations fall when they stop taking the actions needed to continue to function and exist.
We has met the enemy and they is us Pogo