brace for impact

Headline (edited):

Our Deer-in-the-Headlights Moment: The “Worst Market Crash Since 1929” Is Rapidly Approaching and the Fed Doesn’t Know Which Way to Go

The Federal Reserve is stuck between a rock and a hard place. If the Fed pushes rates higher, interest payments on our 34 trillion dollar national debt could spin wildly out of control and bank balance sheets will be in even worse condition than they are now. First Republic just bit the dust, and literally thousands of other small and mid-size banks and in serious jeopardy.  So it would be suicidal to hike rates at this point. But if the Fed were to reduce rates, that would be like injecting jet fuel into a raging fire. Our ongoing inflation crisis is absolutely crushing working families, and the rising cost of living has risen to the top of the list of things that U.S. voters are concerned about. The Fed seems very hesitant to cut rates, because that would make inflation even worse. So at this point the Fed is essentially caught in a “deer in the headlights” moment because it doesn’t know which way to go.

No recent president, not even Trump, has done anything about our massive and mounting federal deficit. It was at $23 trillion just a few years ago; now, at the end of Biden's disastrous term, it's at $34 trillion and rising. Assume about 250 million salary-earning Americans (i.e., no kids, no retirees, no unemployed). What's $34 trillion divided by 250 million people? That's $136,000. If every salaried American paid that amount of money as a one-time payment, the US government would be out of debt. But in this thought experiment, questions arise. (1) What's to guarantee that the government won't immediately start racking up a debt again? (2) Wouldn't a better solution than burdening the American people be for the government to stop all spending for a year or more? (This is a thought experiment.) (3) What about a Milei-style solution that essentially guts the government? Wouldn't that amount to something after a decade, assuming the country could stick with it beyond a presumptive second Trump term? These are only some of my questions. Meanwhile, brace for impact.