America at the brink

If you add up the total debt — state, local, the works — every man, woman, and child in this country owes 200 grand (which is rather more than the average Greek does). … In 2009, the Democrats became the first government in the history of the planet to establish annual trillion-dollar deficits as a permanent feature of life. Before the end of Obama’s second term, the federal debt alone will hit $20 trillion. That ought to have been the central fact of this election — that Americans are the brokest brokey-broke losers who ever lived, and it’s time to do something about it.

The good news is that reality (to use a quaint expression) doesn’t need to swing a couple of thousand soccer moms in northern Virginia. Reality doesn’t need to crack 270 in the Electoral College. Reality can get 1.3 percent of the popular vote and still trump everything else. In the course of his first term, Obama increased the federal debt by just shy of $6 trillion and in return grew the economy by $905 billion. So, as Lance Roberts at Street Talk Live pointed out, in order to generate every dollar of economic growth the United States had to borrow about five dollars and 60 cents. There’s no one out there on the planet — whether it’s “the rich” or the Chinese — who can afford to carry on bankrolling that rate of return. According to one CBO analysis, U.S.-government spending is sustainable as long as the rest of the world is prepared to sink 19 percent of its GDP into U.S. Treasury debt. We already know the answer to that: In order to avoid the public humiliation of a failed bond auction, the U.S. Treasury sells 70 percent of the debt it issues to the Federal Reserve — which is to say the left hand of the U.S. government is borrowing money from the right hand of the U.S. government. …

If that’s all a bit too technical, here’s the gist: There’s nothing holding the joint up.