The national debt is finally a real-world problem

The national debt is finally a real-world problem
https://finance.yahoo.com/news/the-national-debt-is-finally-a-real-world-problem-202357147.html

---

Summary

The article discusses the growing impact of the US national debt on the economy. The author argues that the government's excessive borrowing is pushing up interest rates, making it more expensive for businesses and consumers to borrow money. This is in turn slowing economic growth and making stocks less appealing.

The author also notes that the government now spends more on interest payments than it does on funding the Pentagon. This is unsustainable and will likely become a more important election issue in the future.

The article concludes by discussing some of the ways to get the debt under control, such as spending cuts, tax hikes, and reforms to Social Security and Medicare. However, the author notes that neither party has endorsed a credible debt-relief plan.

In summary, the article is a warning about the dangers of the US national debt and the need for action to address it before it becomes too late.

---

Comment

The dysfunction of excessive debt is always the same, whether it's an individual or a nation.

It should be recognized that the short-term dysfunction of excessive debt is not a major problem, but when such debt is sustained for a long time or exposed to high interest rates, it always leads to social and national financial ruin.

In the case of high interest rates, the U.S. government has reached a point where it is paying more in interest on its national debt than it spends on its defense budget, and this problem will be even more burdensome for future generations and other countries, and portfolio strategies should be based on this consideration.