So today Bush has cheerfully signed the authorization for the federal debt to rise to $8.1 trillion.
Eight trillion dollars that neither political party appears to actually intend to ever pay off; 8 trillion dollars being financed in short term revolving loans.
If interest rates go up 1%, that means $80 billion more in yearly interest. Which will be tacked onto the deficit, and paid for by borrowing yet more money. That additional borrowing pressures interest rates to go up still more. At what point does the push of borrowing another 1% of the total debt push the interest rate up by more than 1%? This, of course, is the point where a positive feedback loop causes the United States to flare up and die in a supernova of hyperinflation. It will certainly happen sometime if we don't get leaders who understand basic economic realities and value the long term future of the country more highly than paying off their fat cat friends for the last election and staying in office to do it again after the next one.
I don't think I could survive in a "Black Powder and Alcohol" future. Without the drugs for my asthma, I'm a basket case, and even with them, I doubt I could earn my keep in such a future, and it won't have room for people who don't earn their keep.
So, is there reason to hope that an epidemic of sanity will sweep Washington, D.C.? Or is it really only a question of how long we have before the end? In the latter case, how long do we have? Is it time to eat, drink, and be merry?
On the other hand, if I am overreacting, if we can expect to see some tough years ahead with an economy squashed by high inflation and interest rates, but life will sort of go on, how should I be preparing?