It’s no secret that the U.S. government is drowning in future promises to pay.
And, as we’re seeing with yet another debt ceiling debate, to keep the promises coming due today, it has no choice but to impose even more promises on the future.
These promises ultimately rest on the heads of taxpayers and burden the economy. And since it can’t possibly be paid the only choice politicians have is to either break those promises or inflate the value of those promises away.
The latter, of course, being a well-trodden path by governments according to history.
Counting all U.S. Treasury’s bonds, notes and bills outstanding, the U.S. Government has $31 trillion in debt. But that’s only a sliver of the promises the government must keep or break.
There’s also Social Security, Medicare, and several other insurance-type schemes.
These programs (which are not funded) are as much an obligation of the U.S. government as Treasury debt and burdens the U.S. taxpayers and economy in exactly the same way. Add these to the $31 trillion in Treasury debt and those promises climb to above $200 trillion.
In this video, I point out how a crucial threshold has been crossed. And the debt ceiling debate could very well prove to be the next big market catalyst.
Take What the Markets Give You.