We Have 3 Years Before The National Debt “DEATH SPIRAL”

by | May 14, 2019 | Headline News | 39 comments

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    According to the U.S. Treasury Department’s Office of Debt Management, the U.S. government is just five years away from the point of no return.  With the national debt spiraling quickly out of control, there are only a few years left before every single dollar the government borrows will go toward funding interest payments on the national debt.

    The Independent Blog said that the main takeaway from the Debt Management Office’s Fiscal Year 2019 Q1 Report, which featured the Office of Management and Budget’s latest projection of the U.S. government’s borrowing from the public, is shown in the chart below:

    FY2019Q1 OMB's Projection of Borrowing from the Public

    ZeroHedge explains the significance of what the chart shows as the Primary Deficit, indicated as the blue portion of the bars in the chart, swings from positive to negative beginning in 2024:

    As part of today’s Treasury Presentation to the Treasury Borrowing Advisory Committee, there is a chart showing the Office Of Debt Management’s forecast for annual US debt issuance, broken down between its three component uses of funds: Primary Deficit, Net Interest Expense, and “Other.”

    That chart is troubling because while in 2019 and 2020 surging US interest expense is roughly matched by the other deficit components in the US budget, these gradually taper off by 2024, and in fact in 2025 become a source of budget surplus (we won’t be holding our breath). But what is the real red flag is that starting in 2024, when the primary deficit drops to zero according to the latest projections, all US debt issuance will be used to fund the US net interest expense, which depending on the prevailing interest rate between now and then will be anywhere between $700 billion and $1.2 trillion or more.

    In short: in the stylized cycle of the US “Minsky Moment”, the US will enter the penultimate, Ponzi Finance, phase – the one in which all the new debt issuance is used to fund only interest on the debt some time around in 2024. –ZeroHedge

    Once we reach that point, the government will have reached the “death spiral,” a point at which the complete collapse of the government and financial system is imminent.

    Cities and territories in the United States that have crossed that “event horizon” to the crisis point. They have all either gone through bankruptcy proceedings or their equivalent, or they have implemented major fiscal reforms that reversed their fiscal deterioration, wherein the best-case scenarios, they acted to restrain the growth of their previously out-of-control spending to restore their fiscal health.

    Don’t hold your breath that the U.S. government will quell it’s spending habits.

    H/T [The Independent Blog]



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      1. I think bernie could speed that up as president

      2. I imagine they still have some tricks up their sleeve. Like negative interest rates. Or QE 4, 5, and 6. Or helicopter drops. Maybe this is where MMT is finally rolled out. I think that’s why it has been covered so much lately. To prepare the people for one last orgy of printing and spending until the trucks stop running..

      3. I heard claims today by those who populate the District of Columbia that the US economy is the best in history.
        Locally, it don’t seem so. The biggest custom cabinetry company in the US just abruptly shut it’s doors here and put close to a thousand people in the street. This cabinet manufacturer was owned and operated by the same family for the last 70 years. They just financed a 9 million dollar expansion two years ago. Now, a deal to sell the company fell through and they closed up shop. This was a company that used all made – in – America products for it’s high end cabinets. I guess customers aren’t doing as well as we are told. Sad

        • JRS

          That speaks volumes considering that DC and the surrounding area feed off the public. Thats the one sustained growth “industry”. If it’s rough there imagine what its like for flyover country that has to stand on its own.

      4. As long as the US dollar retains world reserve currency status they’re ok. More will be borrowed, the decimal point moves over, the banks get funds to refund their losses and the masses get so little that inflation is held in check. Any threat to the aforementioned currency status will be dealt with up to and including war.

        • K2,
          You have it right.
          Our money is “Fakey” stuff anyway.
          We have the resources to support our population
          and their needs, we will be OK. We will not run out of toilet paper, food, water, or much of anything else because we can make it all or can extract it from the Earth.
          We may have to throttle our Eco-nuts and Democrats, but we have everything In North American necessary for modern society.

          • That is until the population on it’s normal path quadruples and is like china. With all resources strained to the hilt and filth/ pollution all over the place and human life is the cheapest commodity there is. The more the population grows, the faster it grows.

        • Yes, correct!!

      5. Off topic: sex

        I just watched a video on YouTube, an interview on Red Ice TV with a guy I never heard of before, E. Michael Jones PhD. Jones wrote “Libido Dominandi Sexual Liberation and Political Control”.


        The show on YouTube

        Controlling The Masses: Sexual
        Revolution &The Role of Swe…


        • I enjoyed this interview and I learned a few things. Check it out.

          As for the coming economic crash, the book now is $30.00 on Amazon.
          I’m tempted to buy it.
          In five years who knows. It might be half price.
          But it might be $500.00, too.


          • GREAT NEWS! Imma really party now!

            htt ps://www.naturalnews.com/2019-05-14-monsanto-bayer-faces-financial-annihilation-after-third-court-loss-glyphosate.html

            • God this is GREAT!

              “Now, a third court case has ruled that Monsanto’s toxic weed killer caused cancer among those who used it. In this case, a California jury has returned an astonishing $2 billion award for the plaintiffs who say Roundup caused their cancers. “Bayer AG was ordered to pay more than $2 billion in damages to a California couple that claimed they got cancer as a result of using its Roundup weedkiller for about three decades,” reports Bloomberg.com.

              It’s one of the largest jury awards ever recorded in the history of humanity, and it shows that Bayer is now facing “financial annihilation” because there are over 13,000 additional lawsuits pending.”

            • In 2016 guess which party Monsanto supported by a whopping 77% to 23% margin!

              It was the Party of Corporatism, a fancy name for Fascism. Republicans, the enemy we sleep with.

      6. 3 minutes without AIR.
        3 hours without SHELTER.
        3 days without WATER.
        3 weeks without FOOD.
        3 months without HOPE.
        And now:
        3 years before SHTF.

        What else could possibly happen?

        • WTF,
          AOC gets elected as President?

          • Fortunately, if that old rag, The Constitution, still has any meaning we cannot have AOC as President until 2024 at the earliest…


            • And if history is any indication, she’s exactly who we’ll get in 2024 if the economy does what it’s about to.

              “I can fix everything tee-hee” wait what’s that iron fist for?

              Female Che Guevarra…

          • If that happens, God help us all

        • What else could possibly happen?
          3 days without a smart phone? 🙂

          • If grid down happens, I’d bet they will spend more time looking for a cell phone signal than looking for good water and food.

          • That wouldn’t necessarily be a bad thing. A downside is no 911 (not that it would help). Probably would wind up dead because of the incompetent civil employees (namely, Johnny Law).

      7. I listened to a lecture at a symposium by some econ guy, at one of the ivy league schools..prob about 10 years ago. He stated when people renig on their debts..do it to retailers their credit is cut off, scores drop etc. Nations do it by war, which cancels the debt of the winning nation..
        Of course.. Stay tuned..
        This nation will never tolerate becoming a 2nd rate power.
        Second is always “last” !!

      8. Lemme know when it crashes…I’ll come to the funeral.

      9. Yes, correct!!

      10. Yes, correct!!
        Nations.. the winning one, liquidated debt via war…

      11. Yes, correct!!
        Nations.. the winning one, liquidate debt via war…

      12. The author doesn’t understand the concept of global fiat money. If the world stopped creating new debt the economies would be boxed in, no new growth. Like a fat female must eat [new debt] in order to maintain and grow to be even more fatter. The debt grows with the value of all its assets and must expand along accordingly. If no new debt, after awhile, things would become more expensive and things wouldn’t be needed to be produced, no new debt, you’d get a deflation depression implosion.

        There will be no US debt spiral. By 2050 the US debt will exceed $50T !!!!!!but so what!!!!!!! the value of the world markets will then exceed $250T, in theory all world economies could grow their debts 100X and still things wouldn’t be much different. You see it is all just a bunch of numbers, as long as things are produced their shall be growth of the system, it must grow, it will grow.

        Don’t let the SHTF boogie person turn you into a hermit that hoards aluminum foil. And then 30 years from now you’ll regret not living your life because you were brainwashed into hiding in a hole.

        Without new debt the economy would be like it was in 1789, and there would be no need for 300 million people already here as useless eaters.

        • pbs.org/wgbh/aia/part4/4h3439t.html

          Plantations, workhouses, and private prisons have always been funded, operated, and justified, using the same basic means.

          Broadly speaking, they are founded by a grant of imaginary, hypothetical money. The laborer is told he is earning a place in polite society, eventually. After he receives enough moral instruction.

          The owner would have been given some kind of bureaucratic makework to the effect of a production quota, in the 1700’s. You can get a loan or a grant, and do all that right now, and will always be able to do this, so long as there is a civilization of some kind. All of our institutions have been more-or-less the same, throughout time. Only the names have changed.

        • So since it’s effectively all bullshit… how exactly DOES it work?

          I mean I’ve figured out the whole “work or die” thing, you have no prayer of keeping up with inflation on fixed income.

          I’ve figured out the whole “invest or die” thing, same deal.

          Buttttt ifffffff theyyyyy justtttttt make up numbers and arbitrarily shift decimal points HOW DOES IT WORK?

          This is like some kind of mass-hysteria or what? I mean basically if it’s all made up then it’s all psychological yeah? Soooo thennnnn what. You get enough people that ain’t getting their needs met and it collapses all by itself yeah?


          “They” (the ubiquitous “they”) appear to refuse to acknowledge this fact and are basically busy doing precisely the opposite of stabilizing it…

          • I was learning a little bit about how ‘terminal’ works, and encountered this defense of cheating, on accident.


            “Beating the game by bending the rules presents its own set of challenges”
            ‘powerful to be able to do things… that overcome our earthly fleshy limitations.’ (paraphrased, there.)
            “we just waste time for fun! Don’t worry, be happy and eat cookie. ;)”

            I think that people gaming ‘The System’ probably have a comparable mentality, of making it a sport. Rich people just might view money this way, maybe, imho.

        • Some debt is good. More must be better! I mean its not like partial default via hyper inflation has ever destroyed an economy before

      13. Medicare and medicaid run out of bonds to cash in to fund their 75%+ operating deficit in 2024. At that point they will be spending north of $1T/year and that expense either goes on the back of the federal government or they stop spending it. Either way the recipients or the economy are fooked. Search market-ticker.org for more details. Karl Denninger has researched it pretty thoroughly.

      14. “…surging US interest expense…”

        Why can’t we coin our own currency, interest free, though.

        This sounds logical, to a nationalist.

        Are we obliged, by globalist treaties, first and foremost.

        While we are accused of occupying other countries are we, ourselves, occupied without sayso over our own resources.

        • All two of our own resources. That’s why. That shale thing’s got maybe 5-10 years left in it and that’s being extremely optimistic.

          • Our groundwater was shipped away to foreign countries, in giant bags, while we were guilted for free water in our restaurants.

            In starving communist s-hole countries, the citizens are told not fish or log, etc, etc, but the same resources seem to be available to money interests, via globalist special drawing rights. (SDR’s.)

            Hoarders on tight budgets have always been blamed for massive shortages, but big govt and too-big-to-fails hoard their inventory form public use.

      15. The plates will keep spinning. I’m not sure how, perhaps a new crypto for domestic use? We’ll see.

      16. 3 years ago, 3 years from now…”We only have xx years before the world ends!” Stop the BS & get a grip… all of you.

        • No.
          This is a “what if” scenario.
          This helps one prepare for a possible future that most don’t like or even conceive of.

          Get a grip? Stop the BS?

          Back at you.

      17. Of course if the primary deficit becomes zero all net borrowings would go to pay interest. This would be great news because currently the US government has to borrow to cover interest PLUS the primary deficit. So you are complaining about what would be a very positive development.

        Two conclusions: 1) The OMB is lying, the primary deficit will not drop to zero. 2) It would be a good idea to learn the basics of accounting before writing nonsense.

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