And actually, I had no idea what “querulous” meant until it popped up on my “word of the day” feed this morning (it means “full of complaints”) and it made me want to use the word.
And, speaking of asides, my Reddit feed told me today that from 2009 to 2019, out of 212 cruise ship overboard incidents, only 48 people were rescued.
So, this is just another reminder not to fall off a cruise ship (especially if you’re selling real estate or mortgages; see how I tied that into my blog?)
No Way Will We Default On Our Debt!
Of all the bullsh*t we get fed in the news on a daily basis, the most bullsh*tty of all was the news that the U.S. would actually default on its debt.
Yes, the debt ceiling crisis was and is real, and yes, it could have fostered a partial government shutdown, but even that prospect was “bullsh*t” and mostly just politics.
But – one thing that would and will never happen (at least in the near term) is a government debt default – where the government actually misses payments to government bondholders.
What fostered so much confusion about the debt ceiling crisis was whether it would just limit government spending or force the government to default on its debt.
And, according to Joe Brown of Heresy Financial, and many other macro analysts, Treasury Secretary Janet Yellen was simply flat-out lying when she said the government would default on its debt if Congress did not raise the debt ceiling.
I mentioned this in a previous blog, but there is no way anyone in power would allow the government to default on its debt, debt ceiling or not, because the results would be so catastrophic across the world.
This is because the entire world economy revolves around and relies upon U.S. Treasury Bonds and Bills (U.S. Debt) to function.
Hence, a default of any kind would bring the world economy to its knees and Secretary Yellen and all the other people pulling the major financial levers in our economy understand this.
Joe Brown released a great video last week explaining why the debt ceiling nonsense is such nonsense: Yellen Is Lying About Defaulting on June 1st (only 7 minutes at 2x speed).
Here is a quick summary of salient points:
The Federal Government has $4.6 trillion of revenues coming in this year – which is more than enough to service all of our debt (about $660 billion in interest).
So, that leaves about $4 trillion left to pay all other government expenses.
But – we spent almost $6.3 trillion in 2022, so how do we make up for that extra spending?
We don’t have to, per Joe, because that was mostly EXCESS spending as a result of COVID – when spending spiked up by about $2+ trillion.
So – this entire debt ceiling fight is about preserving the massive amount of extra spending that was justified by COVID (Cares Act, Build Back Better, Inflation Reduction, etc.), and it is spending that is no longer necessary.
If we simply went back to 2017 levels of spending (when we were still spending like drunken sailors), we could easily balance the budget with current tax revenues, as our total spending was only $4 trillion back then.
With no debt ceiling increase, the government would have to cut spending, yes.
BUT – they would not stop servicing U.S. debt because of the catastrophe it would foster; because there is more than enough revenue to service the debt; and because federal law and our constitution require the government to pay our debts no matter what.
Anyway, a debt ceiling bill was passed by the House and it is now getting fought over in the Senate. And, the debt ceiling issue will arise again without a doubt.
But – no matter what happens, please remember that the government will never default.
The default talk is pure, unadulterated, nonsensical… bullsh*t.
Jay Voorhees
Founder | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167
