The picture above is scary. It shows the insane growth in debt by the Federal government. Note the exponential growth. Can this train be stopped?
I doubt it.
I think that the US has passed the point of no return. It has reached a point where the interest on the debt is growing faster than any possible realistic fiscal plan can stop. We are now paying tens of billions of dollars every year on interest on interest!
Is it possible that the US will be able to get to a fiscal surplus of hundreds of billions of dollars per year? That is what is necessary to simply keep up with the interest payments and keep them under control.
Oh, wait. What happens if interest rates go above their insanely low levels? What if the Treasury has to start paying 3% or 4% on short term interest rates and 7% or 8% on long term bonds? Forget it, now there is no way to catch up to the interest payments.
So this means that the Fed will keep rates too low and inflation will skyrocket and that is the only way that the US government can hope to get out of this fiscal mess.