The U.S. SHOULD BE DOWNGRADED!

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So Fitch downgrades American debt and the response from the Biden administration is, it’s bizarre. No, no, Joe, it’s not bizarre. Quite frankly, it’s scary. It’s scary and quite frankly, it’s long past due. We should have been downgraded years and years and years ago. We’ve been on an unsustainable path for a very long time. All right, let’s.

Let’s go through, let’s break down the math, shall we? It’s worse than what we actually, like to get our arms around right now. But let’s go back in time first. We’ll go back in time. Listen, to hold on to treasury bills, which is, again, super safe, government assets.

No risk whatsoever. You go back to 1928. And if you put a hundred bucks, a hundred bucks away, 1928, and treasury bills, it grew to 2,141 by the end of last year. While medium grade corporate bonds, about 46,000 stocks, a hundred dollars would yield you 624,000. Okay, super safe.

assets, however, they are no longer. The Congressional Budget Office updates its long-term budget forecast and says that our debt, the US debt, held by the public will surpass gross domestic product this fiscal year. And the interest on that debt will equal about three quarters of discretionary

non-defense spending. By 2031, it will be as large. Now, let’s take Medicare, let’s take Social Security, interest on all that. You have to pay interest on all that, right? Okay, whatever we have a debt ceiling. Gotta make good on our debts. Gotta make good on our commitments. Okay, I got Medicare, Social Security, and interest. All legally basically non-negotiable.

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Military spending, do we really ever do a damn thing about that? Do we ever cut into that at all? Nah, nah, nah. We continue to spend more and more and more. It was actually an interesting line. We make fun of Russia. We call Russia a gas station with an army. Well, if you take a look at it at our points, we’re essentially an insurance company with an army.

Think about it. Russia’s a gas station with an army. We’re an insurance company with an army. Medicare, Social Security, and interest on our debt. God, I used to make fun of the U.S. automakers just prior to them getting bailed out by the Obama administration. They were basically retirement companies that also made cars.

Anyway, the CBO’s current forecast is BS, it’s too optimistic. It basically says that the net interest rate paid on that debt will barely top 3% in coming years. Really? Well, short-term bills and notes are yielding more than 5% today. So let’s be a little bit more honest here.

assumptions are a little bit ridiculous and there’s consequences. Um, three quarters of treasuries, and I’ve talked about this before here on the program, um, we handle our debt. It’s kind of like a credit card. We pay off one credit card with another credit card. So three quarters of treasuries must be rolled over within the next five years. Now, if you add just one percentage point to the average interest rate, um, keep every other number and changed.

That would result in, wait for it, wait for it, $3.5 trillion in additional federal debt by 2033. The government’s interest bill alone would be $2 trillion. Now you want me to put that in perspective? Individual income taxes are gonna bring in 2.5 trillion this year. Think about that, think about it.

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interest of $2 trillion. All of the taxes, income taxes we brought in, individual income taxes, 2.5 trillion. So basically all the taxes are going to be used on money for nothing. Interest payments for nothing. This is where we’re at. Quite frankly, it’s not bizarre. It’s scary. It’s sad. It’s our biggest national security threat.

and both parties aren’t doing a darn thing about it. I’m gonna couple this right now with Social Security and Medicare. Again, you have the two top candidates and I’ve mentioned this, they don’t want to address the problem. They don’t want to even admit that a problem exists. I was from Fox News, Senator Bill Cassidy from Louisiana, was talking about…

the idea of pushing for entitlement reform. He says, you open yourself up to potshots. Politically, it is a losing position. This is the type of leadership that you’re getting by our fearless leaders in Washington, DC. There’s a massive problem there, and they don’t wanna do a darn thing about it because of the politics that are involved. Cassidy.

the top Republican on the Senate Committee on Health, Education, Labor, and Pensions was also on a bipartisan working group for a proposal to extend the life of Social Security, which will be insolvent by 2033. Biden made it clear he’s not interested in even bipartisan proposals to ensure the sustainability of Social Security. You have a president who’s engaged in order to accomplish any of this.

And if we have a president as we do now, who doesn’t want to do anything, oh, he makes the right comments. But when you look at his proposals, they’re not serious. And there’s no reason to do anything. And let’s be honest here, okay? Donald Trump leading on the Republicans right now, he doesn’t wanna do a darn thing either.

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Doesn’t. All right. What could be done? What might our government do? And this, again, this might scare some people. Like I said, not bizarre, scary. And I’m going back in time, just going back to 2010. This is when the obviously close to the aftermath of the financial crisis. And I posed a question back in 2010 to-

my listeners and the readers of my newsletter. I said, you know, what if foreign entities just stop buying our debt? If we had a bond vigilante type of a situation like they had in some of the Mediterranean countries of Portugal, Ireland, Italy, Greece, Spain, back at that point in time. Yeah, the entire nations right there that their borrowing costs went through the roof.

You know, what if, you know, China, what if somebody’s like, they take away our credit card? Well, I looked into it and our government has a plan. They have a plan, people. You’re not gonna like it. No, you’re not gonna like it, but they have a plan. What is that saying? It was by the bank robbers who, you know, what was it, Willie Sutton, was his name? They said, why do you rob banks? Because that’s where the money is.

Where’s the money here in this country right now?

Where is the money? Where is there a large chunk of change, large chunk of money that government could tinker with the rules here and there when it comes to these accounts and change the dynamic and funnel more money to the federal government. And then if you’re looking at retirement accounts, you’d be spot on. Yep.

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Pensions 401ks, IRAs, you name it, they all fall under ERISA rules. So there’s this woman, she’s a far left wing, her name is Teresa Geralducci, and she was proposing this back in 2010, eliminating all the tax breaks for 401ks and replacing them, wait for it, with guaranteed government retirement accounts.

Oh, that sounds wonderful. And basically her plan was, is that all workers would be mandated by law to contribute 2.5% of their income to a government account with a 2.5% employer match. And then Uncle Sam would guarantee a rate of return at 3% above inflation. Basically putting together another Ponzi scheme.

Yeah, and again, at the time you had the Treasury and the Labor Departments, they were discussing, they set their sights on slowly but surely forcing people to convert their IRAs, their 401Ks into these government annuities. And, who is it? Mark Irby, the Deputy Assistant Treasury Secretary at the time, Senator Barack Obama.

The question is how to encourage it and whether the government can and should be helpful in that regard.

Yeah.

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Again, this is their way out. You’ve got trillions of dollars that are just sitting there.

that are just sitting there that believe me, Uncle Sam would love to get his greasy little hands on those accounts. Again, I do think that they need, in order to kick this off, they need, never let a crisis go to waste. They would probably need a major sell-off in the stock market and talking about the government coming in to save the day and…

The stock markets are too volatile and it’s bad on retirees and look at what it’s done and it’s only for rich people. And you can kind of see how the entire thing would play out and how they would go about handling it. It’s not fantasy. I’m not making this up. This stuff is actually in the works. They’re actually considering these things. And hey, you know, government needs.

More money, borrowing costs go up. Hey, you know what? Let’s force our citizens to buy our debt. Cause that’s essentially what they’d be doing. They’d be forcing us to lend them our money in the form of government securities. And you know what they’ll do in the same sense? They tell us to thank them while they were doing it, while they were confiscating our assets. Anyway, I know it’s frightening, but again,

This is the reality and this is, let’s be honest here, this is our fault. It’s our fault. Yeah, let me be honest, you know, this whole, everybody’s Republican, Democrats, you know, I’m being honest, I’d give my right arm to put Bill Clinton back in the White House. I am, I’d put Bill Clinton back in the White House, put Newt Gingrich back in charge of the House, let’s go back in time.

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The last time this country was on a intelligent fiscal path was under the Clinton administration. Okay, sorry Republicans, wasn’t under Bush. Wasn’t under Bush, it wasn’t under Trump. Okay, it was under Bill Clinton. Yeah, sure, sure. Did Newt Gingrich and the boys have to drag him kicking and screaming to some things, absolutely fricking lootily, but it worked. Do we have any semblance of that?

taking place right here and now? Yeah, I don’t think so. Anyway, watch Dog on wallstreet.com.