2.26 It's All Polluted Bad Debt

As discussed above, there are only two options when the world holds more claims to wealth than there is real wealth:

  1. They will not get their money back in full
  2. They will get back money that is worth less

Either way - in aggregate it could all be viewed as bad debt, because even if you took every dollar in the world, you couldn't pay off the debt, and you could never settle all the claims in Reality.

This means that essentially all debt in the world, after 2,000 years without a jubilee, is bad debt.

If everyone in the world lined up at the proverbial window and demanded their assets, we would discover they do not exist in Reality.

THEREFORE THE GAME MUST BE RESET. This is the purpose and function of Jubilee.

On August 12th, 2023, the Wall Street Journal ran an article entitled The scary Math Behind the World's Safest Assets. Subheading Washington has laid the seeds of a crisis Wall Street can longer ignore.

"The Federal Reserve's fight against inflation has amplified the risk of an unthinkable fiscal crisis made possible by decades of Washington dysfunction."

"Now it is too late. The Congressional Budget Office... says that U.S. debt held by the public will surpass gross domestic product this fiscal year, and that interest on that debt will equal about three quarters of discretionary, non-defense spending. By 2031, it will be as large."

"Medicare, Social Security, and of course, interest are legally non-negotiable. Military spending isn't really optional either. No wonder the federal government is described as "an insurance company with an army.""

"Yet the CBO's forecast actually looks too optimistic. It envisions the net interest rate paid on that debt barely topping 3% in coming years even though short-term bills and notes yield more than 5% today. The swelling pile of debt means minor changes in assumptions now have major consequences."

"Consider that 70% of treasuries held by private investors must be rolled over within 5 years. Say you added just 1 percentage point to the average interest rate in the CBO's forecast and kept every other number unchanged. That would result in an additional $3.5 trillion in federal debt by 2033. The government's annual interest bill alone would then be about $2 trillion. For perspective, individual income taxes are set to bring in only $2.5 trillion this year."

"Compound interest has a way of quickly making a bad situation worse - the sort of vicious spiral that has caused investors to flee countries such as Argentina and Russia."

So here we are, in 2023, with debt passing GDP. In 2020, the CBO predicted this wouldn't happen until after 2030.

And it appears that sometime in the 2030s, our annual interest bill may surpass our annual individual tax revenue, and interest expenses will surpass discretionary non-defense spending.

This means that the vast majority of resources will be consumed by false promises we made to our selves (entitlements), false promises we made to others (debt), and an insecure world roiled by decades of deceit (military).

As the false promises and conflicts of the past consume us, there will be less and less to invest in the future, until finally the American Experiment ends.

Unless we voluntarily wake up, arise, unite, and forge a New Covenant between our Selves, God, Nature, and the World.

Forward to 2.27 The Next Financial Dominoes
Back to 2.25 Defaults On Retirement, Healthcare, And Entitlements
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