re: Jobs Numbers

quote:

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Can you at least try to put a time estimate on this? Do you honestly think it'll happen in the next 40 years?

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There are a LOT of variables which can come into play, but if enough things remain the same then yes I think it will happen within the next 40 years.

Over the last 80 years, deficits have run an average of 12%-13% over revenues. Since we got off Bretton Woods in 1973 it's been 15%-16%. Since 2008 it's been 25%-26%, from 2019 til now it's been 33%. The projections into 2028 estimate deficits being 23% over revenues each year.

Currently, the CBO projects our debt servicing to overtake both Defense and Medicaid spending as major parts of the budget within 10 years (which means, at current spending ratios debt servicing would be somewhere above 13% of the budget). If this holds true then we can expect it to overtake Social Security within 20 years (which would put debt servicing as over 19% of the budget). Currently, debt servicing is ~8% of the budget, which puts it as a little higher of a percentage of total revenues (11%)

Estimates like that are always shaky, but it's all we have to go on so from it we can guess:

-In 10 years debt servicing will jump by 5% (to achieve that 13% number, which we can only guess will be 16% of total revenues)
-In another 10 years it will jump by 6% (to achieve that 19% number, which again we can only guess to be 22% of total revenues)

If we follow that path, it should jump another 7% in the following decade (making it 26% of total spending, 29% of total revenues) and then 8% the following decade (for 34% of total spending, 37% of total revenues ), which brings us to 40 years out.

There's a LOT of math I'm likely leaving out (especially revenue estimates, I just don't have time to do it today) and it doesn't take into account wars, natural disasters, etc. but it shows a possible path based on the very limited estimates we have (and can make).

Once debt servicing becomes a greater percentage of the total revenues than it is of annual deficit spending (which would be between years 30 and 40 in this very loose estimation), we either default through non-payment or hyper-inflation (if they just remove the debt ceiling altogether, but figuring the "when" of that would just be shooting in the dark).