Wharton business school projects U.S. has “about 20 years” to implement “corrective action” on debt

Writes Charles Bryant:

Hi Lew,

This seems to have received little attention, as expected.

“When Does Federal Debt Reach Unsustainable Levels?”

While attempting to downplay current record debt levels (as one might expect), this publication from the prestigious Wharton School should raise significant alarms, even for its subscribed elites.

Key takeaways:

“Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).”

“This time frame is the “best case” scenario for the United States, under markets conditions where participants believe that corrective fiscal actions will happen ahead of time. If, instead, they started to believe otherwise, debt dynamics would make the time window for corrective action even shorter.”

I don’t know about you, but I’m betting on the latter.

The Best of Llewellyn H. Rockwell, Jr.