“We pay off the debt in buying the company with cash from its ongoing operation and by selling off pieces of the business.” – Barbarians at the Gate
Why do windmills love hard rock? They’re huge metal fans.
Two characters were talking to each other in a Hemingway novel (The Sun Also Rises):
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Irrespective of who has been in the White House, the debt of the United States keeps growing. Gradually. Okay, not gradually. For the most part, the national debt has been doubling every eight years as Presidents keep spending money we don’t have to get re-elected. Wait, why does this keep giving me flashbacks to my first marriage?
To be fair, it’s never fun to be the President who says, “Alright guys, I know the party has been awesome, but it’s time to stop spiking the punch with grain alcohol, I mean, look at Nancy – her liver must be 143 years old now and her husband is hammered. So, let’s go home before we all have hangovers that will last for a decade.”
I found a twenty on the street, so I decided to do what Jesus would do: I turned it into wine.
Debt is funny. A little is hard to notice. When I was first married with The Mrs., we bought a new car. As in, a seriously new car, from a dealership and everything. The monthly payment was okay. So, a few months later, we bought a second one. These weren’t expensive cars, perhaps (total cost) less than 1/3 of what we made in a year. So, not Porsches™ and Lambos©. Think: small Nissan™ truck.
Ouch. We weren’t bankrupt, but we were having to watch all our expenses each month.
When I paid the last payment for the last car? Life was so wonderful. And as debt dropped, we decided to not get into debt anymore (except for houses). It was amazing. That short-term pain and the little hangover that went with a debt moratorium only lasted a little bit. Life was so much better afterward, and all it cost was half a dozen years of discipline. And those were the last “new” cars we ever bought.
Did you hear about the guy in Mexico who drove his Audi® into a lake? Quattro Sinko.
But on a national level, debt has been piling up. It will destroy the country. Some folks (Vox Day, for instance) has long pegged 2032 as the date when it all cracks up. Me? I called 2026 back in 2018. I mean the United States? Everyone could see the U.S.S.R. breaking up, heck, their flag only gave them a one-star rating.
I might be overly pessimistic, since inertia is powerful and the United States has trillions of dollars in inertia. The first of the two factors that led me to that conclusion were the rising medical costs. Eventually, if they keep rising, an aspirin at a hospital will cost $5,382 after insurance.
I wish that were a joke or an exaggeration. The Mrs. went into the hospital earlier this year, and her COVID test was (allowed cost) $1,000. It was negative.
What’s the difference between an art student and a large pizza? The pizza can feed a family.
Yup. Eventually, the costs of medical care – private, Medicare, and Medicaid are going to eat the entire budget. We’ll become like a country that works all day for Band-Aids™ and Neosporin©. Of course, that’s a ridiculous outcome. People will stop going to doctors first. And they are. And our medical system is a mess (from a financial standpoint).
That, as I said, was the first problem.
The second one can’t be escaped – it’s the interest rate trap. The problem is that the United States has been carrying huge chunks of its debt on short-term rates, having to roll it over every few years (on average).
I bought some dirt at high-interest rates. I guess I should have avoided the loam shark.
The United States gets, generally, pretty favorable interest rates – at least when inflation isn’t running at near-record levels. But what happens when, instead of 1% or less, the payments are 4% or more?
Interest on the debt doubles. Take all of the soldiers, stealth fighters, rifles, artillery, missiles, MREs, and aircraft carriers, not to mention all the crayons that the military eats in a year? The interest payments on the debt will be more than that.
As much as I’d love to blame the Leftists, this isn’t a Left-Right thing, mostly. The healthcare crisis was started by Ted Kennedy (can’t turn away people who can’t pay) in the 1980s, but the Right has had plenty of time to fix it. And they’ve only made “compassionate conservatism” while trying to make a “kinder, gentler country” their watchword while expanding medical programs and creating the worst Frankenstein monster yet – a non-private, non-public healthcare system.
Ted was an awful golf player. He couldn’t drive over water.
And the spending? The Right has spent as much (if not more) than the Left. The biggest stop to that in my lifetime was when the Republicans in Congress pushed Clinton into not spending all the cash, and he agreed so he could get re-elected.
In the end, there are more things than just financial that are tearing the country apart, but financial is enough. Angry, hungry people don’t really care who caused the hangover, they just want the pain to go away. Regardless of how it’s done.
That’s how it ends. Gradually, and then suddenly.
