Meanwhile, the deficit is about to break $2 trillion – for perspective, all federal revenue under George W Bush averaged around $2 trillion.
Debt interest *alone is set to cross $1 trillion, eclipsing even our bloated military budget that beaches quarter-billion dollar piers in Gaza for sport.
The next milestone after that is Medicare spending, which together with Social Security has its own $78 trillion unfunded liability, according to its own Board of Trustees – outside estimates are higher.
Governments Are Rabid by Nature
Now, none of this is shocking: governments by nature try to spend too much – indeed, much of economic history is made up of governments desperately trying to finance their mountains of debt.
Debt brought down Rome, first with hyperinflation then with a gutted military that barbarians walked right over.
It brought down Spain, as New World gold finances an effective government takeover of the private sector. And France, bankrupted by financing foreign wars – in this case, the American Revolution. The Qing collapsed under debt and even Great Britain who owned half the earth for nearly a hundred years.
It's why we got the Magna Carta – indeed, Constitutions – as kings pleaded for more money. It's how we got central banks, as first Britain then the rest of the world licensed money printers in exchange for debt finance.
To this day government debt crashes countries – countries from Turkey to Venezuela to Nigeria are currently undergoing debt crises, with Argentina desperately trying to pull out of one.
How Does It End?
And, with so many historical cases, we know exactly how this ends: investors stop buying government debt, shutting out governments and leading to massive austerity and soaring inflation as the government retrenches.
Going by history, the government will cancel the trillions it promised — starting with Social Security and Medicare — then pull back to where it can pay the Praetorian Guard and not much else.
In short, once debt hits the magic line, Washington goes from Sugar Daddy to wild animal. And, historically, it happens much faster than people imagine — in Hemingway’s famous phrase, countries go bankrupt gradually then all at once.