I have long been titanically bullish on the United States. Mostly because I can do math.
The US owes $38+ trillion.
The US Gross Domestic Product (GDP) in 2024 was $29.2 trillion. So the debt is 130+% of that.
That alone is enough information to write off the US. If the country were a business? EVERY financial advisor on Planet Earth would tell you to declare bankruptcy and move on with your life.
Oh: And we are currently adding $1 trillion to the debt – every 100 days. And that rate will only rapidly accelerate as the debt gets ever larger – and with it the interest percentages and payments.
That’s the debt death spiral. Game. Over.
But wait – there’s more. The US is facing $210 trillion in future unfunded liabilities (mostly Social Security and Medicare). So you can tack that on to the national tab.
But wait – there’s more. US money is entirely fake. And has been since the US went off the gold standard in 1971. Since which time the dollar has lost 87% of its value.
The only thing that’s been propping it up? Has been the US force feeding the planet the dollar via a Saudi Arabia mandate that all oil be purchased with it. Forcing everyone in on the lie that it actually has value.
Except after a half-century-plus of the US stripping its dollar of nearly all value? The planet no longer wants to play along.
Saudi Arabia allowed the dollar-for-oil mandate to expire last year. And since? More and more global oil deals (and all sorts of other deals) are being done in currencies other than the US dollar.
And as the inevitable move away from the US dollar increases in speed and power? Tens of trillions of global dollars will come flooding back into the US – because no one else on the globe wants them.
Think you’ve seen dollar devaluation thus far? You ain’t seen nothing yet.
Oh: And of course to fund our debt? We have to sell US treasuries and bonds. Except more and more? There is less and less global interest in purchasing them.
Which further drives up our interest rates. And forces US to buy more and more of our own debt. These aren’t IOUs – they’re IOIs.
Oh: And the country that is the current largest holder of US debt? Is the shady (and I don’t mean from the Sun) Cayman Islands – at $1.85 trillion. And their share is RAPIDLY expanding. And our government was caught lying about it. I’m sure all of that bodes something less than well for all of US.
But wait – there’s more. The US economy was idiotically force-converted by our government into being about 70% consumption. Meaning 7 of every 10 dollars of economic activity – is predicated upon We the People buying things.
Except We the People LONG ago ran out of money. Total US household debt is now at a record high – $18.59 trillion.
Which is 64% of last year’s GDP.
Which means We the People will be spending less and less consuming – and more and more paying back debt. Just like the government.
Which means the US economy will be growing less and less – until it begins shrinking more and more.
And we’ll be doing all of it? With dollars that aren’t worth pennies.
But wait – there’s more. We now have lovely Artificial Intelligence (AI) rapidly adding itself to our national equation. AI will destroy (many) tens of millions of jobs – in just the next few years.
Which means no more incomes for (many) tens of millions of Americans. Which means a WHOLE lot less consuming.
Which means our 70% consumption economy? Will implode faster than a star going supernova.
Which means the tax revenue necessary to at least pretend that we’re servicing our great and growing national debts and shortfalls? Will implode faster than a star going supernova.
Oh: And if you think a Universal Basic Income (UBI) is the answer? Some questions….
From where will the US government get the money for a UBI? What with the dollar, the economy and tax revenues all massively imploding as they very soon will be?
And why would you want the government to do such a thing as a UBI? Given it’s already $210 short on other UBI-type programs? What in the history of humanity and government makes you think this government will suddenly, miraculously achieve fiscal competence?
Speaking of government bailouts….
All the above points to a US economy that will very soon crash in a way that will make the crash in 2008 look like the merest of trial runs.
What postponed the inevitable then? Government bailouts. $29 trillion worth, to be exact.
Of course that titanic bailout has contributed mightily to the looming financial disaster. Because we didn’t have the money then either.
So much like we do for the federal budget each and every year? We faked the money into existence – and added it to the national debt tab.
Except today the US government is too much in debt – and its dollar too valueless – to pull off any sort of 2008-sized bailout this time.
Oh: And this time? The bailout would have to be MUCH huger.
Because it ain’t just the residential housing market (record total mortgage debt: $13.1 trillion) that is about to collapse.
It’s also the personal credit card market (record debt: $1.2 trillion).
It’s also the commercial real estate market ($4.9 trillion). Which was instantly worth tens of trillions less post-Covid when a whole lot of people figured out offices for their businesses were no longer necessary.
And Big Tech has been borrowing HUGE – to self-churn its enormous AI bubble. AI is billionaires borrowing hundreds of billions – to spend on each other and add billions to their respective billionaire-nesses.
And OpenAI’s Sam Altman has already preemptively said he expects a Big Gov bailout when their “Too Big to Fail” bubble bursts.
The US is abut to face a MASSIVE, all-encompassing economic implosion. While holding the highest total debt ever on record.
Total US debt – public and private – was in 2024 $102.2 trillion.
The US’s federal government is simply not in a position to bail ANY of this out. Let alone ALL of this.
The national debt in Bailout 2008 was $10 trillion. It is now FOUR TIMES that amount.
The US dollar is of even less value now than it was then.
And the planet is two decades sicker of being force fed the US’s dollars and debt.
So from where do the purchasers of either come – when we go looking to yet again bail ourselves out?
I don’t see ANY prospective takers – anywhere on the planet.
So that leaves US printing MANY tens of trillions of dollars – to then hand to ourselves.
Even more IOIs. For government bailouts. And government spending. And government debt service. And….
Think you’ve seen dollar devaluation thus far? You ain’t seen nothing yet.
This piece originally appeared on Seton Motley’s Substack. Reprinted here with permission.
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Couldn’t agree with your post more.
That being the case, I find myself asking, what can we do, as individuals, about surviving the impending ‘Venezulation’ of the US dollar? I see / hear / read dire warnings about the US financial implosion from many quarters and from many ‘experts’. I see lots of gloom and doom and not so much about how to ameliorate the personal financial damage that is forecast for all Americans (or at least the majority of us who aren’t billionaires and don’t already have private jets ready to fly us to well-protected and well-stocked private islands).
I heard that we should move our dollars to hard(er) assets like Gold, Silver, Real Estate? For any who are well enough off financially to invest in those kinds of things, good for them. For the Average (or in my case, Median) Joe, there doesn’t seem to be any apparent logical path to protect what little I have managed to put aside. Even if I can do a move for my dollars, I am not sure that my daily routine and ability to survive will be that much better than anyone else. ‘Prepping’ might help, but I am not convinced that it is a long-term solution for the majority of Americans – even those who have started to prep for food, water, power and security will be negatively impacted by the last and final collapse of the American fiat currency.
I posit that as a society, we have become too dependent upon public utilities, local government agencies, large corporate suppliers (food, etc) and our baseline assumption that our elected officials always have our best interests in their decision making. When the financial collapse of the dollar becomes obvious and begins to hurt, I wonder how long we will be able to rely upon those entities to provide what they have been providing?
These days, I simply remember that old chorus, one that reminds me of my current, potential situation (apologies to the Hew Haw gang):
“Gloom, despair and agony on me,
Deep dark depression, excessive misery
If it weren’t for bad luck, I’d have no luck at all
Gloom, despair and agony on me….”
In any case, prayers for blessings on all of our households in the coming days.