Exponential Debt & Spending Is A Given

in LeoFinance2 months ago

Hey Jesspenders

As I learn more about how our economy works, I am pretty amazed at the levels and depths we can push it towards without it completely collapsing. It speaks to the power of belief and the level of GDP we have created with the help of the various industrial revolutions and deflationary nature of technology.

We've unlocked a substantial amount of human and resource potential, and in doing so, we've abused it thinking that we now have minimal financial constraints.

Through money printing and manipulation of economies, governments feel they can continue to divvy up the pie and use that new money to stimulate the economy and keep it going in the direction of central planning.

Since the world still chiefly relies on dollars to manage trade and liquidity between assets, it's crucial for us to look at how the world reserve currency is managed.

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The exponential growth of debt

GDP might be growing year on year, but it's only been one factor in the equation of growth. We have to look at how much debt and monetary easing is pumped into the system to generate this economic growth. Each year this drain on the economy is "hidden" by the growth in GDP.

But if we look at what governments or particular what the US government has been doing, we can see a concerning trend of exponential debt.

  • The Bush Years - 8 years

President Bush added $6.1 trillion, or a 101% increase, putting him in fourth place of presidents running up a bill. Bush launched the War on Terror in response to the 9/11 attacks, which led to multi-trillion-dollar spending on the War in Afghanistan and the Iraq War. Bush also dealt with the 2001 recession and the 2008 financial crisis.

  • The Obama years - 8 years

Barack Obama (2009-2017): Under President Obama, the national debt grew the most dollar-wise ($8.6 trillion) but was fifth in terms of percentage: 74%. Obama fought the Great Recession with an $831 billion economic stimulus package and added $858 billion through tax cuts.

  • The Trump years - 4 Years

As of the end of FY 2020, the debt was $26.9 trillion. Trump added $6.7 trillion to the debt since Obama's last budget, a 33.1% increase due to the effects of the coronavirus pandemic. Let's not forget he still has a stimulus package on the way and his only had four years to run up that amount versus Obama who had eight years.

So the time frame is getting shorter, but the figures are getting bigger.

  • The Biden years - The next 4 years

We all know Biden is a big government guy, and big spending is likely to be the name of the game, not that it would matter, but the narrative towards spending will be stronger under him. We've already seen the narrative of MMT or more money today, lol proving to be the dry power governments want to use to validate more spending.

Hey big spender

We've already seen the federal reserve openly state they have an inflation target of 2%, and they're willing to go above it to compensate of the years it was below 2%, which is absolute nonsense, but the point is the same.

Big government is gearing up to spend big, and oh boy did this pandemic give them the financial part of the recipe to trigger this massive debasement with much less backlash than it would under other circumstances.

Cash can't last

At this rate, along with the call for a new Bretton Woods, cash will continue to hold less of its purchasing power each year. If we are to protect the purchasing power we get from labour and investment, cash may not be a wise choice.

This may be good for some of us in the developing world, not being crushed by the power of the dollar, but how much fo a benefit is that really to the overall state of the world.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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Well, I'll be spending my fiat on BTC and wait for this all to blow over. Lovely Christmas day pump today!

Merry Christmas mate

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I’ve got some dry powder ready I was low key Hoping for an xmas and new year sell off to fund your holidays so I could pick up some cheap Sats but these fuckers ain’t budging

Haha, yeah man, it's like they are possessed! I want to get to Bitcoin redfish by the end of 2021 and these guys aren't making it easy!

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LOL if they buying at these prices so aggressively then I am licking my lips thinking at how aggressively the reverse is, I am actually reducing my buying now still doing the daily but keeping more and more fiat ready for dips now, time to be systematic, can't be willy nilly like we were when it was below ATH

Haha, yeah I stopped doing my monthly buys and just keeping the daily amounts, keeping shit in reserve to go large when there's a gross amount of dumping going on! But if Celsius pop another bonus up, I'm not going to turn down free sats, even if my fiat won't get as much!

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Through money printing and manipulation of economies, governments feel they can continue to divvy up the pie and use that new money to stimulate the economy and keep it going in the direction of central planning.

I seem that is not true solution.

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I think it depends on which side of the isle you stand, for government and asset holders its great if you owned a home since 1971 or you hold stocks or had bonds you would be doing fantastically well, if you were just a wage owner who saved cash you being punished

there are winners and losers in every system

WoW...
This is mean that the government and the people are playing Economic Game.
Is it right?
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I am a Jessie and I want to comment I am a big spender in my own boundaries. We are not looking forward to the new laws here that you have to pay to have savings so yes spending it and investing seems to be the best plan now. Both good for us and the economy but down deep it’s frustrating because it’s our money we shoals be able to do anything with it we want without having to pay for it because we have it.

We sure live in a strange world we live in where savers who I feel are doing the right thing, gets punished and more spending and overspending is celebrated. I don't know how this system is going to work for Europe but I am watching it closley.

I do t het the political angle either. Maybe we as savers with money make up for the people in debt so strange. For example with 4 kids you save for them to go to college or buy a car when they start the working carreer now you have done that for 20
Years , loyal as we were and now you have to pay for being a saver??? So investing in ... is the best thing , the dots are there because I just don’t know we have 6 days left and maybe beicks is the best option houses and real estate is doing great so , but we don’t have much so it’s a difficult question to crack. Silver and gold might be the best option to go with , I will be able to wear it aswell hahahahhaah 6 days ......

From what I can tell is that because you guys use the Euro, its not a sovereign currency like the US and other countries where they can print try to stimulate, so they trying to get people to spend to stimulate the economy instead, either by forcing their savings out of hiding or getting them to borrow at negative rates.

I looked at dutch real estate and it's quite overvalued as is already many people are already as people invest in it as a store of value and forcing first-time buyers out of the market, so younger people can't afford homes, especially in Amsterdam.

I haven't really looked at the dutch stock market, but gold and silver is always a good bet, and you can look like royality walking around with a homes value on your neck and wrists lol

I think shit hits fan next month!

That sure is a bold forecast, I've heard someday April side, but I am not convinced yet, this system has more than 9 lives and it just keeps going lol money printing still has a few more years to work I am sure

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Look like Print and spend is motto.

Is there any plan to repay the debt, I don't think so.

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Not that I can see, even with greater taxes in the future, it wouldn't be enough to pay it back so might as well hyperinflate the currency and pay it back with worthless new paper money

Printing and pushing more money is not a good solution always.
This just devaluate the money. Lot of countries had done the same in the past. What are we going to do do when we would need $100000 dollar for one banana ?

Lol well it’s the only solution they have and it’s not going to stop they’ll do it until it can no longer be used we’ve seen this in history and I’m sure it will repeat

If that does happen, ask the Venezuelans and Zimbabweans what they’ll do! I think they’ll just move to a CBDC or launch a new currency and reset and keep going