Updated: Apr 9
America will not be conquered by a foreign army. The enemy that will be the end of this great nation cannot be found on a map. The adversary that will conquer us is debt.
By now, you should all be aware of the massive U.S. national debt. As of this writing, it is somewhere around $30 trillion. Economists and politicians do everything they can to make us believe this level of debt isn't that big a deal. But somehow we know they are just playing games with us, and that, at some point, our debt will be the end of us.
How will the debt destroy America?
I explain this in detail in my book Collapse, but here's the simple answer: Interest rates and interest payments. For the last 10 years, interest rates have been historically low, averaging 2.5% on U. S. debt from 2011 to 2020 (see image below for interest rates paid on U.S. debt be decade). But they will not stay that low.
Two and a half percent interest on a $30 trillion debt is $750 billion, and a rise of 1% means an additional $300 billion in interest. What's the problem, you ask? The problem is the government's average income over that same period (its tax receipts) has been around $3 trillion.
What this means is that, if interest rates go to 3.5% (a 1% increase), the government will be
paying $1.05 trillion in interest on a $3 trillion income (35% of its income will go to interest). At 5%, it jumps to $1.5 trillion or 50% of income, at 7% it balloons to $2.1 trillion or 70%, and at 10%, it becomes $3 trillion or 100% of income.
As rates go up (and they will), investors will start to notice the huge amount we are paying in interest and begin demanding even higher rates to loan us money. And, at some point, we will not be able to borrow anymore because the rates will be too high. However, we will still be stuck with massive interest payments, plus all the other things we are on the hook to pay for (like national security, Social Security, Obamacare, education, roads, and so on).
Eventually, the weight of these interest payments will push us into default, the federal government will be bankrupt, and the entire economy and nation will collapse.
Exactly how and when will this take place? Read Collapse to find out.