TD₿:What's a Debt Spiral, and is the US already in one? by James Lavish
TL;DR Bitcoin is a protection against the wasteful spending of incompetent, irresponsible politicians.
Hey Bitcoiners,
Last week, Congress approved the $1.7 trillion dollar omnibus spending bill. The bill was over 4,000 pages long and was released at 1:30 am.
US Senator Rand Paul spoke up about the ridiculousness of the spending bill. He placed the bill on a tray labeled “Danger” and “Hazardous debt.” It’s rare that I agree with a politician, but I have to say, Senator Paul nailed it here.
The contents of this massive spending bill were likely unknown to many of the politicians because they didn’t even have enough time to read it before voting on it.
One person who did read it was Rep. Dan Bishop and his team, who outlined just some of the insane spending measures that are contained in the bill, highlighted in the thread below. It was an eye-opening read.
This bill is a perfect example of the kind of wasteful spending we should expect to happen when politicians think money is free. Hell, they are passing TRILLION-DOLLAR spending bills and don’t even care to know what they’re spending taxpayer money on! There has been zero cost of capital for the last ~15 years, and politicians have taken it as an opportunity to spend money like drunken sailors.
The result is our national debt has accelerated at a rapid pace. The national debt just crossed a record $31 trillion dollars and growing. Not only that, but this $1.7 trillion-dollar bill comes at a time when CPI inflation still sits at a 7 handle!
It’s obvious that we have a huge spending problem in this country. A vast majority of these politicians don’t seem to understand that their spending during the pandemic is intrinsically linked to the spike in consumer price inflation we’ve experienced. It appears there were zero lessons learned.
Therefore, I have no reason to believe that the rate of government spending will abate anytime soon. Once things hit the fan again, you can bet the house that these politicians won’t hesitate to throw money at any problem that arises.
With US debt-to-GDP currently at 121%, the country is now in a debt trap that will likely lead to a debt spiral, where investors lose confidence in the country’s ability to pay its debts, bond yields spike higher, which only worsens the financial outlook of the country even more.
James Lavish wrote this excellent blog post explaining what a debt spiral is and whether or not the US is already in one now. (08/21/22)
It doesn’t matter how high the cost of living rises, how high the debt burden gets, or how much faith people lose in the currency, Congress will continue to spend.
Fortunately for these politicians, the consequences of their frivolous spending will not be felt by them, but by their children’s and grandchildren’s generations. (Avg. age of Members of the House of Representatives is 58.4 years; of Senators, 64.3 years).
This is why Bitcoin is so important. The writing is on the wall. The current monetary system has been mismanaged so badly for decades by incompetent politicians that the math no longer makes sense.
For younger generations, a parallel system is currently being built for them so that when this sovereign debt bubble collapses, and governments debase their currencies into oblivion, Bitcoin will be there to help pick up the pieces.
Ultimately, Bitcoin is simply protection against irresponsible government spending.
Tick tock next block,
Sam Callahan
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