From ““The Forecast for Anarchy” (Tom W. Bell) , THE ROUTLEDGE HANDBOOK OF ANARCHY AND ANARCHIST THOUGHT, 2021”

“At the same time that the state grasps for new powers, its financial foundations crumble. To judge from the United States’ own cold, hard numbers, the strongest government on Earth will soon go broke.

The Governmental Accountability Office (GAO), which serves as something like the financial conscience of the U.S. government, explains why current spending levels are “unsustainable”:

“Debt held by the public [i.e., federal debt] increased from $15.8 trillion (or 77 percent of gross domestic product (GDP)) at the end of fiscal year 2018 to $16.8 trillion (or 79 percent of GDP) at the end of fiscal year 2019. By comparison, debt has averaged 46 percent of GDP since 1946.The debt-to-GDP ratio is projected to surpass its historical high of 106 percent,” racked up by spending on World War II, a bit after the year 2030 on the GAO’s accounting. (GAO, 2020)

Around 2030, even if taxes managed to capture 100 percent of all wealth generated in the United States, not enough would come in to pay down the federal debt.

From there, the slippery slope leads ever downward to fiscal ruin. The Congressional Budget Office (CBO) concurs, pegging 2028 as the year in which federal debt held by the public will exceed GDP. (CBO, 2018)

Among the unhappy consequences:

• Federal spending on interest payments on that debt will increase substantially, especially because interest rates are projected to rise over the next few years.

• Because federal borrowing reduces total saving in the economy over time, the nation’s capital stock will ultimately be smaller, pulling down productivity and total wages.

• Lawmakers will have less flexibility to use tax and spending policies to respond to unexpected challenges.

The likelihood of a fiscal crisis in the United States will increase. Investors will become less willing to finance the government’s borrowing unless they are compensated with very high interest rates; if that happens, interest rates on federal debt will rise suddenly and sharply.”

1.   Government Accounting Office, “The Nation’s Fiscal Health,” gao.gov (March 2020).

2.    Congressional Budget Office, The Budget and Economic Outlook: 2018–2028 (April 2018): cbo.gov.