Debt Spiral: A Path to Collapse

As government borrowing increases, so does the cost of servicing that debt, resulting in a cycle where new bonds must be issued at higher interest rates to cover existing obligations. This compounded problem exacerbates federal expenses, particularly when debt-to-GDP ratios reach critical thresholds without corresponding reductions in federal spending. The unsustainable nature of this cycle mirrors historical economic collapses of empires, signaling a potential crisis for the U.S. economy if drastic measures are not taken to control spending and deficits. The market reflects this instability as it questions the creditworthiness of the U.S., especially in light of emerging economic powers like the BRICS nations that now have a larger aggregate GDP than the U.S.