America 4.0: America is on the verge of a fourth crisis that will determine the fate of the nation. This time, it is a national debt crisis.
Approximately every eighty years, America reshapes itself after a decisive meta-crisis: the Revolutionary War, the Civil War, the Great Depression, and the subsequent Second World War.
With the help of France, the patriots defeated the British army and the loyalists. America 1.0 resolved the core national disputes with independence.
The Civil War gave rise to America 2.0, as former radical abolitionists gradually adapted to the new normal, while the defeated Confederacy joined the ranks of the loyalists as one of the losers in American history.
The attack on Pearl Harbor by Japan destroyed isolationism, unified America, and forged America 3.0, an emerging global superpower.
The frequently mentioned $36 trillion publicly held national debt severely underestimates fiscal reckoning. Over the next 30 years, Social Security and Medicare will face a combined deficit of $124 trillion. These liabilities are not hypothetical; they are inherent and will structurally and automatically increase outstanding debt.
For decades, America has been able to easily increase its debt, partly because the dollar is the world's reserve currency. However, market commentary and the actions of major fixed-income participants indicate that Washington's era of easy borrowing is coming to an end. Warning signs include the fact that U.S. Treasury yields continue to rise even after the release of the Federal Reserve's meeting minutes.
Source: The National Interest
Original article: https://www.toutiao.com/article/1829941950557194/
Disclaimer: The article solely represents the author's views.