Folks are talking about a return to historically normal interest rates and “the most predictable economic crisis in history”. The talk of an American sovereign debt default seems plausible to me, and perhaps inevitable, given the deep pathologies of America’s ruling class, and the great masses of U.S. debt dependent voters backing the current system.
The crisis may be coming, but that doesn’t tell us what it will look like, or how to get ready. Has anyone come across anything helpful on how to prepare for the day when America eventually defaults on its debts? My understanding is that the middle class from the private economy was wiped out by the German Weimar moment, while most government employees did comparatively OK. Hyperinflation is different from sovereign default, however. It’s not clear to me who will get most heavily looted and cleaned out in the crack up. I don’t see the Depends wearing boomers as losing very much — far too many votes there. Entitlement demanders won’t take the hit — taxpayers will. But how high can taxes go?
I’ve heard many discussions of the likelihood of an American sovereign default crisis. But what I haven’t seen are discussions of this: when the system cracks apart, what is the likely scenario in America? And what effect will the crack up have on countries like China which are heavily invested in the dubious promise of sustainable America debt payments and consumer demand?
Has an academic or journalistic literature developed yet on this topic?