The text discusses the upcoming financial crisis related to the US debt ceiling and the expectations surrounding it. David Stockman warns that while Donald Trump promises a new era of prosperity, the reality is likely to be a severe economic problem caused by government spending and debt. The political landscape in Washington, marked by both parties' irresponsible fiscal behaviors, is described as a "Fiscal Doomsday Machine. "
Stockman highlights the significant increase in public debt over the years, noting how the current situation is worse than in the past. He contrasts today's political climate with that of the late 1970s when there was more accountability regarding debt and spending. The earlier checks and balances in governance helped manage the federal debt, but he argues that this balance has been lost since the 1980s.
The article points out that the current Congress is reluctant to address entitlement reforms or cut spending, making it difficult to align votes for significant fiscal changes. The suspension of the debt ceiling ended recently, and with a divided House, Stockman predicts a major political standoff over increasing the debt limit.
With the Treasury running out of cash, the upcoming confrontation between lawmakers is described as a "political chicken game. " He notes that the government's spending has far outpaced its receipts, leading to a rapid increase in debt. If the Fed does not intervene, rising interest rates are expected to further complicate the situation.
In summary, Stockman portrays a bleak outlook for the US economy, predicting significant challenges to managing the national debt and calls attention to the urgency for fiscal responsibility.
https://www.lewrockwell.com/2025/01/david-stockman/brewing-us-debt-ceiling-crisis/
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