Governments owe more money than ever. The United States alone owes around $40 trillion.
There's a quiet way to make a debt that big smaller without anyone voting for it: keep interest rates below inflation. Every year prices rise, the debt is worth a bit less. So is the money in your savings account.
It has a name: financial repression. You won't hear it on the nightly news, but it's been done before. After World War II, governments shrank their debts mostly this way, and people who had lent them money lost about half their buying power in five years.
Is it happening again? The dials above are the test. If interest stays below inflation, year after year, while the debts keep growing, it is.
- 1 · The debt is huge
Too big to pay back the normal way.
- 2 · Prices rise faster than interest
The debt shrinks a little in real terms every year.
- 3 · Savers pay for it
Your money buys less, quietly, year after year.