Just no money
Over the past 20 years, the United States has unleashed so many armed conflicts that one can only compare with a disaster film. Obviously, the operator has a desire to continue shooting bloody episodes around the world, but, unfortunately, for him (and fortunately for the rest) the director’s budget is not rubber.
One of the main trump cards that Barack Obama actively used in the presidential race 2008 of the year, was the accusation of George W. Bush of unreasonable spending of budget funds. As it turned out, the current head of the White House turned out to be an even bigger stranger than its predecessor: in 8 years, the US national debt increased from 70% to 115% of the gross domestic product.
Recall from 1945, the cost of the US government exceeds the income of the country by an average of 3% of GDP. The problem of the budget deficit lies in the fact that America has become a hostage to its own myth of undeniable political and military superiority on a global scale. Despite the fact that the share of the overseas state in the global economy is falling, Washington continues to increase spending aimed at implementing the crazy idea of global domination.
At the same time, the almost unceasing seventy-year growth of the budget deficit did not, until recently, pose a serious threat to the US economy. As soon as the money in the American treasury ended, the government began to print bonds, which they then exchanged from the Federal Reserve System (US central bank) for dollars. Note that the financial institution often bought the country's debt obligations with unsecured money.
As a result, not always materially supported credit obligations of the US authorities were sold to central banks of other states at a rate not exceeding 2-3%. In exchange, foreign lenders received Fed acclaim on the reliability of the US monetary system and the promise that meager interest would be paid on time. The beautiful carrot proposed by Washington, although it had an unpleasant taste, but at least satisfied the feeling of hunger of the economies of foreign countries.
As it now turns out, only the old fence remained from the currency garden. Servicing the public debt is already costing Washington 250 billions of dollars, which is 1,5% of GDP. It seems that the inclusion of the printing press at full capacity, which will start to make money out of thin air, will entail an outflow of foreign investments that make up more than 35% or 7 trillions of dollars in the structure of public debt.
They add fuel to the fire, which does not seem to leave a trace from the American economic system, the upcoming presidential elections. So, for the 22 of the day, Washington's national debt grew by 237 billion, closely approaching the mark of 20 trillions. If we compare in nominal terms, over the past three weeks, the increase in public debt has exceeded the country's debt to 1944 year.
Thus, the new head of the White House in a hurry will have to solve a financial problem, which in 8 has escalated to unprecedented limits. Obviously, attempts to get out of the economic depression will be undertaken in one of two scenarios.
It seems to be the most realistic that the new president would kindly offer the Americans who elect him to tighten their belts, raising taxes and reducing social benefits. If the situation develops according to this scheme, the US economy will face a recession, which will drag on for many years.
The second option assumes that the United States will soon make a gift to its creditors, declaring a default in the country. In this case, losses estimated in trillions of dollars will be incurred by a number of leading countries, including China, Japan, and the UK. However, the world does not have to wait for anything good from the actions of the American establishment ...
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