The US Treasury bonds can also avoid default.

CN
Lanli
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1 year ago

The US not defaulting on its debt is also possible, but it would require tax increases and reduced government spending (welfare). Originally, I thought it would be difficult to achieve this under the competition between the two parties, unless a major inflation forces the people to this point, like in the 1970s.

However, the recent bipartisan passage of the bill made me feel that the US also has rulers. So the question is simple: will these rulers increase taxes and reduce spending to bring the US finances into balance?

This is a challenging short-term vs. long-term game. It is obvious that the rulers make a lot of money in this system, so asking them to do the opposite is like cutting meat.

Conclusion: It will probably still require a major inflation to increase the people's suffering index before taxes can be raised. But whether this inflation can pass smoothly, that will be left to fate.

In terms of timing, perhaps within the next 10 years.

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