Ep. 17 | The National Debt Series | Debt Spiral

When interest on our debt overtakes national defense, the alarm bells should be deafening. Sound money, private property, and national security — this is what's on the line.

Transcript:
Hello, everyone, A Working Man's Guide back to the consequences of the national debt once again, in this these segments, look to my book chapter seven for full details. I'm just going to hit some of the highlights.

A bond market crisis is where we're headed if we don't change our habits regarding the national debt. And as I mentioned last time, the big red warning flag now is the fact that interest expense paid against the national debt is the second largest element in the federal budget. It's larger than national defense. That should scare all of us. We should be terrified of debt, and here are some of the mechanics.

Here's how a bond market crisis plays out when you owe that amount of debt. There is a risk assessment, a risk rating on those bonds. If our risk of payment starts to increase, or risk of non payment, the interest rate is going to increase on those bonds, if anyone will borrow them at all, as that happens, if your interest rate increases, the interest expense, increases your risk, increases which increases your interest rate, which increases your interest expense, which increases your risk, you can see the spiral, the downward spiral you get into that is disastrous. That means an erosion of personal income through the lack of sound money.

The currency is being devaluated, and you have an erosion of property rights. Because what crowds are going to fall back on? Taxation, regulation, confiscation? That's where they go. They go after your property. And I just want to summarize the major negative impacts because of that a you cannot defend your country properly if a major war breaks out, we have no dry powder. We have no capacity to build up and win that war decisively, like we have done in our past. You cannot have sound money. Our currency is eroded through inflation. That means your incomes are going down. Your well being is directly impacted, and private property rights are under threat, under siege.

Where does the government go to pay its bills? It goes to its people. It seizes property. It seizes income, it sees as assets, that's what happens. So, for those that would say, the national debt, doesn't matter. I say, You're a fool. The implications are deep and consequential we must change our habits, thank you very much.