YouBet said:
LOYAL AG said:
There won't be a balanced budget for at least two decades so give up on that. The current national debt is roughly equal to total entitlement spending since 1965 and the demand for entitlements is only going to grow as the boomers transition into retirement. Their mass retirement is also going to drive up labor cost because they are significantly bigger than Gen Z which is replacing them in the workforce.
I'm by no means defending the Fed or the politicians but much of this is structural and way beyond their control. Worse still the things they can control you can rest assured they'll **** up. This push towards green energy and EV is simply not possible in the timeframe they want it done and that's going to cause a lot more pain and inflation than we're already going to see.
The world is changing and we don't have a roadmap for it. Now add to that the abject morons we like to elect and you can be certain this isn't going to go well.
This. Frankly, there is nothing Powell can do at this point. No one in his position can. Our debt is so high and our fundamentals are so out of whack at this point that we are in unchartered waters. At this point, monetary policy is analogous to squeezing a water balloon. Whatever he does (raise or lower) he will break something critical. You literally just saw this with the bank crisis.
I've seen some make the comment "We need a Volcker!". Yeah, he was dealing with $3T in debt. We are 1,000% higher than that just 40 years later. Volcker would be in same spot that Powell is.
Agree that Yellen is incompetent as others have said. She advertised this during her confirmation hearings. She has no business being in that position so she's a net negative to this process.
All of this is correct but what I was referring to when I said structural problems is actually peak population which is very nearly here. For all of recorded history population growth has been the primary driver of economic growth. We don't have an era in history with sustained growth that doesn't feature population growth.
We're currently at 8b people and I'd guess the peak is 8.5b before it plateaus then falls off for the rest of our lives. China alone assures we won't see growth when you realize their population in 2050 will be half what it is today. There is no other region that is big enough to generate 700m to replace those people never mind additional hundreds of millions to generate meaningful growth.
Now realize that most of Europe is stagnant and on the verge of similar population reductions, the US is more or less at its peak with our largest generation half way into retirement, Russia is in a similar spot to China, Japan has already peaked, Africa is far too unreliable from a food production perspective and South and Central America are stable at best. India appears to still be growing so that will slow down the decline but they alone can't stop this. There is no other part of the world that is going to generate meaningful population growth and current birth rates are far too low to reverse these trend. Global population is going to start shrinking and it won't stop for decades.
For all the fear of AI replacing humans at the workplace we're going to need significant amounts of automation just to staff the workplace as it exists today. 20 years from now we will have fewer people working than we have today, that's already known.
This is the time bomb we aren't discussing and maybe we don't need to since there isn't a solution. Globalization created the greatest era of peace and prosperity in human history but it also crashed birth rates which appears to be leading to the end of globalization and my guess is the other side of this will see us make up for all the peace and prosperity of the past 80 years with violence and famine.
The federal government was never meant to be this powerful.
