A solid analysis. In the US we are devaluing as the way to handle the debt. For most of the post WW2 period, revenues were ~ 20% of GDP regardless of tax rates and outlays were ~22% of GDP. We allowed ~ 2% inflation which stabilized the economy. That ended in 2008 when the Obama government basically bailed out the financial wizards just as the FDR boomer time bomb of retirements took over. The debt and debt service exploded and Fed interest rates were cut, an attempt to export inflation. We are now at the crossroad where the Fed had to put a real value on capital and the debt service is now a major factor, certain to squeeze all outlays. Citizens will not be pleased at the situation the politicians have created. There has never been free anything. A lot of people will be quite angry.
A solid analysis. In the US we are devaluing as the way to handle the debt. For most of the post WW2 period, revenues were ~ 20% of GDP regardless of tax rates and outlays were ~22% of GDP. We allowed ~ 2% inflation which stabilized the economy. That ended in 2008 when the Obama government basically bailed out the financial wizards just as the FDR boomer time bomb of retirements took over. The debt and debt service exploded and Fed interest rates were cut, an attempt to export inflation. We are now at the crossroad where the Fed had to put a real value on capital and the debt service is now a major factor, certain to squeeze all outlays. Citizens will not be pleased at the situation the politicians have created. There has never been free anything. A lot of people will be quite angry.