re: Do experts on the money board agree with what the feds did today?

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We don't?

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Not nearly to that extent. Theirs is 49.1, ours is 38.5. The average savings (in the US) for 35-44yr-olds is ~$27k while the average savings for 45-54yr-olds is ~$48k.

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Is that that much lower than the US?

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Yes, the average savings in the US is ~$65k. This falls in line with the difference in savings by age groups (45% between age groups, 48% between countries).

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The point is a crippling debt load hasn't been all that crippling.

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That's a poor point as you're trying to compare debt loads in two societies which have very different fiscal and economic behaviors from one another (another example is that the Japanese still largely prefer to use cash rather than credit/debit cards, which undoubtedly aids in their larger savings).

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We have no reason to expect the US to "collapse" based on any current read out.

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Yes and no. Here's the "yes":

--We're not at the 1920's German Papiermark levels, but that's solely because the USD is the skinniest kid at fat camp. The problem is that we're eating as if we could never get fat. What this means is that almost every country is having problems with inflation right now, the USD being the primary reserve currency means we're able to weather it better than most as the world is more dependent on it than any other single currency. As long as that driver of value remains, the USD will continue to stay among the strongest in any global economic problems (see: Milkshake Theory).

Here's the "no":

--The primary driver of value for any fiat currency is how much of it exists. For instance, a mint original copy of Action Comics #1 is worth over $3M. If everyone had 20 copies of it, you couldn't give it away. Currency isn't any different (at least from a generalized view).

When the federal government creates debt but never pays it down (like ours has been doing for over 20 years now), that creates a lot of excess currency. The USD is (by far) the primary world reserve currency, so that excess can be blunted to varying extents as it spreads throughout the world. The problem is that creating debt like that means you need people to buy that debt. As you go deeper into debt, you'll need to offer more and more in return to get people to buy that debt. If you are only servicing that debt, it will eventually get so expensive that it creates a debt spiral in that you need to create debt in order to service the debt you already have, then you'll need to create even more debt in order to just service that new debt, which means you'll have to create even more debt in order to just service that debt, which means... etc.

Unless the debt starts getting paid down, the eventuality is the collapse of the currency under the weight of the debt. That outcome is a fiscal certainty unless borrowing slows and there's some movement on paying down the debt.

There is absolutely nothing in the works at the federal level to come anywhere close to balancing the budget, much less pay down the debt. Nothing. To the contrary, despite which party controls what branch of government we've seen a somewhat steady increase in debt creation since the Great Recession. The fiscal irresponsibility we saw during COVID threw gasoline on the lightly burning embers of inflation, causing it to flare up. The Fed raised rates to fight that inflation, yet both the federal government and the consumer are still feeding inflation by creating massive amounts of currency through debt creation.

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Rather, that's wish-casting from those hoping for things to burn.

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Why do you think inflation refuses to drop below 3%? After a year of higher interest rates, why are both PPI and CPI starting to consistently come in "hotter than expected"? Why are consumers still creating historic levels of credit card debt while credit card interest rates are at historic highs?

Last year the federal government paid just over $1T to service the debt at that time, going forward there's no point where that amount lowers. As more debt is created but never discharged, that amount only increases. For FY2023 it was just over 23% of total revenues, the last time it was anywhere close to that was the late 90s when we were paying down on the debt. From that point until 2023, it ranged from 15%-18% of total revenues. FY2022 was 16.9%. In other words, we've seen a roughly 6% increase in debt over revenues in only one year. Going back to at least 1977, the next highest increase was 3% (and that was the early 80s when Volker had rates sky-high to fight inflation and trade our trade deficit was only a fraction of what it is now).

In July the debt was $32.6T, today we're at $34.6T. This means that around every 4 months the federal debt increases by $1T (prior to COVID it was around 12 months). With only servicing debt without paying it off, that timeframe will continue shorten as time goes on and that shortening will happen faster. This isn't speculation, it's basic math.

I would argue that this puts us now beyond the point where 2% annual inflation no longer reduces (nor even maintains) debt burden. We may even be beyond the point where 3% maintains debt burden.

Because there's nothing in the works to change course on the federal government's debt creation, there's nothing in the works to change the fact that the growth of debt servicing is going to outpace revenue growth (if it hasn't already happened). This isn't "wish-casting", it's looking at the data and extrapolating what's likely to happen based on what's driving that data. It's nothing more than understanding cause and effect.