“Two Ways. Gradually and Then Suddenly.”
(Hemingway)
Revaluing gold on The Fed’s balance sheet might put off the evil day - currently at $42.22 a troy ounce:
The government of “We the People” owes people money. The “people” owed were of historical past contexts in the US the first We the People.
The other way of going broke is to raise interest rates when you owe a fortune - a trillion dollars a year in interest:
The U.S. government spent a record US$232 billion in interest payments on its debt in the first quarter of 2023, over 50% more than a year ago and over three times what it paid in the same period of 2003. That comes as the Fed lifted interest rates a whopping 5 percentage points beginning March 2022, including a quarter point on May 3, 2023.
1 Like
This is why taxes in 1950 had a stated rate of 90% on the top bracket. While most of the wealthy used write offs to avoid the full 90% the effective tax rate was high.
The effective tax rate is higher again now. I do not have the figures at me finger tips.
If we default on the debt in the next month the plan is to take power and lower taxes on the top bracket. This would stop much of the infrastructure budget outlays and stop the US from retooling. We would shrink our economy. But the wealthy would not pay as much in taxes.
Sounds like a plan, sarcasm.
2 Likes