Will the US survive?

The other day, thew 17^th to be exact, I posted an article…okay, more of a rant…on the US and the rest of the world economically speaking. I made it clear that the US historically is a giant welfare checking account for the rest of the world. Also, in that article I raised 3 questions:

Can the US turn this around?
Can the US be saved economically?
Is there hope for the US long-term?

In this article I will answer those questions. Although in reality, they boil down to a single question…

Will the US survive?

I know this is another “long read”. But to understand the situation there has to be context. That context is facts, figures, evidence, statistics, and history. Without those, this would all be my personal opinion. Oh wait…it is all my personal opinion…you have to decide for yourself what you believe to be true.

By the time you are done reading…well, the answer will be clear if you know what we are looking for. Meaning, can the US “survive” as what exactly…if at all.

Let’s look at 3 solid undeniable, indisputable economic facts:

Personal debt of US citizens is at an historic high…and growing.
Corporate debt of US companies is at an historic high…and growing.
US national debt is at an historic high…and growing.

For this part of the conversation we will address the national debt. The total US debt is now well over $36trillion dollars, heading quickly towards $40trillion…maybe 1 – 2 years…2 years tops.

Here is a figure I want you to clearly understand…in 2025 the US will pay out just about $1trillion in interest on the US national debt. That’s about a 2.7% interest rate on the total US debt.

And finally, before I deep dive into the numbers…the US government is currently spending about $6trillion per year in the government budget…of which about $1.2trillion is a deficit. Yeah, meaning we are borrowing $1.2trillion each year so the government can spend it. Here’s an odd fact to consider…the amount we are borrowing each year for the government to spend is almost what the interest paid is each year to pay for the national debt. Odd, don’t you think?

Here we go…

For this scenario we the people decide that the US government will become fiscally responsible. It takes over a year but, Congress passes the Fiscal Responsibility Act in 2026. There are two major provisions; 1) the US will operate on a balanced budget each year, 2) the US will pay off the US national debt over 100 years. Yeah, I know…100 years sounds like a long time to pay off the debt, but hang in there with me. And since it took until late 2026 to pass this legislation, the national debt is now $40trillion (probably more in real terms, but we will call it 40 for this case).

So the first thing that needs to happen is eliminate the $1.2trillion deficit each year to comply with Part #1 of the 2026 FRA. Now the annual US government budget (money remaining) is only $4.8trillion with the elimination of the annual deficit. And just to make it easy, we will keep the interest rate on the US debt at 2.7% for the next 100 years.

So here is what we are looking at in the US for federal government budget and spending…

Total available annual budget for 2027 is now $3.3trillion after making the debt payment and the interest payment. That is 60% of what the current budget projection is for 2027.
So to balance the budget we will have to reduce government spending by 40%.

Well, here is where we run into a bit of a problem. The US government currently spends money on the following each year:

24% on Medicare and Medicaid (health insurance)
21% on Social Security
13% on the military

That totals 58% of the current budget. So if we only have 60% of the current budget left to spend…and we keep spending 58% on Medicare, Medicaid, Social Security, and the military…that leave exactly 2% for the ENTIRE remaining US federal government spending…2% !

Do the math…that is $96billion total for the rest of the US budget outlays. Want to get an idea of how much of the remaining current budget money covers? That covers less than 1/5th of just the benefits for veterans and federal retirees. AND NOTHING ELSE FOR ANYTHING ELSE !

Bottom line…

paying off the US national debt is a 100% impossibility

…even if we spread it out over 100 years.

Depressed yet? Well, heck…don’t be. Modern Monetary Theory says that sovereign governments not only don’t have to pay off national debt…they can keep borrowing forever…as much as they want ad infinitum. Sounds great, right? Ah, no.

Here’s a question to ask yourself…Do prices of goods go up or does the value of the dollar go down?

Take this example:

1874 (150 years ago) the price of gold was $23 per ounce
2025 (current +/-) the price of gold is $3,000 per ounce

Did the price of gold go up? Or, did the value of the dollar go down?

To answer that question try this…Did anything at all change in the actual gold? Yes, there is way more of it now than 150 years ago so it is not a diminishing supply issue. And the weight of that gold, 1 ounce, is the same today as 150 years ago. So the only logical answer is…the actual/real value of gold stayed the same…but, the value of the dollar diminished by 13,000% since 1874.

Here’s another example:

In 1874 you could buy 1 acre of Virginia farmland for $9 (just less than ½ oz of gold at the time).
In 2024 that same acre of Virginia farmland was about $5,000 per acre (about 1.6 oz of gold)

Did the price of Virginia farmland go up…or did the value of the dollar go down?

Now, think about it…in 2024 you would have to provide 160% more gold to buy that acre of Virginia farmland (150 years later). But, if you were paying in US dollars you would have to hand over 55,000% more US dollars!!!! So the value of that land about tripled but the dollar amount paid for that same land went up 550 times. So the dollar tanked during the 150 year time span.

When prices of “stuff” is compared to US dollars…the value of the US dollar is evaporating.

Again, let’s look at this…

100 years ago the price of silver was about $1 per ounce.
A brand new house in a middle-class neighborhood would run you about $6,200…about 6200 ounces of silver.
Today a brand new house in a middle-class neighborhood will run you about $410,000…12,000 ounces of silver.

So 100 years later you have to hand over less than twice the number of ounces of silver for that average home. But, you have to hand over 66 times more US dollars for the same house. Yeah, that means the US dollar is worth 3% of what it was 100 years ago when looking at real value.

What does that mean…the US dollar is all but worthless when compared to actual “value” of goods in our everyday lives. In other words…the US dollar is not worth the paper its printed on. And that means its “fiat” currency. Yup, there is no actual value to the US dollar…none whatsoever. The true value of the dollar went away in the 1971 when President Nixon took us off the “gold standard”. Yeah, prior to that you could redeem dollars for actual physical gold. And, in 1964 the US stopped redeeming US dollars (silver certificates) for actual physical silver…the same year the US stopped putting silver in US coins.

So what is the US dollar backed by? Nothing…absolutely nothing. Look at a $20 bill…US currency. It says right on the front of the $20 bill…”Federal Reserve Note”. Ah, you know what a “note” is? It is a “loan”, a “promise” to pay…nothing more. And to make maters worse…it isn’t even a promise to pay from the US government!! The “Federal Reserve” is a private company owned by banks…NOT owned by the US government.

Granted, the $20 bill states “This note is legal tender to all debt public and private” But, consider this…if it is not from the US government, but from a private company (Federal Reserve), who actually backs that claim of it being “legal tender”?

US currency…nothing, absolutely nothing, of real value…real value went away more than 50 years ago. Today US currency is only backed by faith in the US government…or more correctly faith in the Federal Reserve. Yup, nothing more than a promise that the money is good.

Ah, but what about the US dollar’s actual worth…

Compared to land 100 years ago the US dollar is now only worth .2% of its value…point 2% ! (yeah, way less than 1%)
Compared to gold 150 years ago the US dollar is now only worth .8% of its value….point 8% ! (yeah, less that 1%)

But, you say, “that is ancient history!!!” Ah, no.

The US dollar comparisons between 2014 and 2025:

Average home prices…US dollar down 50%
Average price per gallon of gasoline…US dollar down 29%
Average price of new car…US dollar down 53%
Spot price of Silver…US dollar down 80%
Spot price of Gold…US dollar down 150%

You got that? Even since 2014 the US dollar is WAY down!!! 30 – 150% when compared to the real value of real goods.

And check this out…during that same time period average US wages were only up by 18%. Think about that folks…the average wage in the US was up less than 20%…while the dollar lost real value from 30 – 150%!!!!!!

That is losing ground economically big time!!!!! But you know that…you are living it. And those economic losses are just as real over the last 10 years as it has been over the last 100 or 150 years. And that is fact!

Summary –

We’re screwed!!!

Here’s what we are looking at:

The US dollar is only worth a fraction of what it once was…even 10 years ago.
The prices of everything are skyrocketing.
Real wages are only rising a fraction of what prices are.

The average American is tanking economically. And the facts, statistics, and evidence prove that beyond any doubt.