Massive government spending by both parties has had disastrous effects, but under Joe Biden, that inflationary spending has gotten so much worse.
In fact, since the start of 2023, the chance of a US debt default has gone up by 300%, according to a leading analysis firm.
Leading Firm Sounds the Alarm
MSCI is an international financial leader and says there has been a big hike in the purchase of credit default swaps (CDS). Fed Secretary Janet Yellen and other top officials have made it clear.
The US government is short on cash to pay the minimum monthly debt payments. By the end of February, the chance of a debt default rose to 11.3%, a hike from the 3.3% we started the year with.
Now, into the first week of March, we are staring down the barrel of a very nasty potential collapse.
It’s not just those holding US Treasury bonds who would be hit by a default. It would crater the whole market and lead to a big economic catastrophe. The entire world would have even worse effects.
Sen. Hawley: "Treasury Secretary Janet Yellen said she would take extraordinary measures to make sure the United States doesn’t default on the debt? But I guess all of a sudden we have billions laying around to give to Ukraine. She’s there now hand delivering the check." pic.twitter.com/1lHtjHiUfz
— Becker News (@NewsBecker) March 1, 2023
Why Are CDS So Key?
The reason that Credit Default Swaps (CDS) are so important is they are basically a bet or hedge against bonds defaulting.
The sale of CDS is expected to keep going up going into summer, as the Treasury’s chance of not paying its bare minimum keeps growing. As for raising the debt ceiling, that debate remains in progress still.
The US federal government already hit its loan limit of $38.3 trillion two months ago in January. Biden and the left want the debt ceiling raised forever, but Republicans say if that happens, then there need to be some cuts made.
In other words, you can’t just keep spending forever with zero consequences.
Biden is playing chicken with the train here and is willing to make the US will lose its creditworthiness. He’s willing to let the US be a pariah on the world stage if it means he can just keep recklessly spending.
The fact of the matter is something needs to be done about this out-of-control debt.
In 2 mins Biden tells 5 lies:
1) U.S. has never defaulted
2) Republicans paid off debt in Trump Admin
3) We would default w/o new debt
4) "I reduced the debt $1.7 billion" (??)
5) Not taking on more debt would hurt America's credit pic.twitter.com/XbeCKtN2Jg
— Tom Elliott (@tomselliott) February 28, 2023
As Marjorie Taylor Greene said many times at the State of the Union address, Biden is a liar. His claims about defaulting aren’t really correct.
The claim that he paid off $1.7 billion in debt is untrue, as is his claim that America’s creditworthiness will sink if more debt isn’t agreed to.
This is his way of blackmailing the entire government and US economy to force through the big government green socialism of the woke left. The situation is spiraling out of control.
We can hope it doesn’t go over the edge of the cliff, but at this point, precautionary measures need to be taken and you can expect to see CDS sales continue to climb.This article appeared in StatesmanPost and has been published here with permission.