How the U S Is Quietly Erasing $38 Trillion in Debt (Transcript)

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How the U S Is Quietly Erasing $38 Trillion in Debt

If you look at the debt clock in Times Square or check the official figures from the US Treasury, you will see a number that defies human comprehension.

 It is currently spinning past thirty five trillion dollars and heading rapidly toward thirty eight trillion dollars. To put that into perspective, if you stacked 38000000000001 dollar bills on top of each other, the pile would reach not just to the moon, but beyond it. For decades, politicians and economists have dismissed this number. 

They told us that deficits don’t matter because we owe the money to ourselves or that the debt is manageable as long as the economy grows. 

They treated the national debt like a scorecard in a video game, a high number that looks scary but has no real world consequences. in 20 24, the math changed. We have entered a new era of fiscal reality where the debt is no longer just a number. 

It is a predator that is beginning to consume the budget of the United States government. For the first time in history, the US government is spending more on interest payments on the debt than it is spending on national defense. 

Think about that. We are spending more to pay off the bondholders of the past than we are to equip the military of the present. We are spending more on interest than on the entire Medicaid program. The interest bill alone is approaching one trillion dollars a year. This creates a terrifying phenomenon known as the debt spiral. 

In a normal household, if you have too much debt, you cut your spending, you stop eating out, you cancel Netflix. But a government is not a household. A massive portion of U.S. government spending is mandatory. Social Security and Medicare. These are promises made to an aging population that cannot be politically broken. 

So the government cannot cut spending. Instead, to pay the interest on the old debt, the government has to issue new debt. It is borrowing from a new credit card to pay the minimum monthly balance on the old credit card. This increases the total debt, which increases the interest payments next year, which requires even more borrowing. It is a mathematical feedback loop that leads to exponential growth. 

The terrifying reality is that there’s no conventional way out of this trap. There are only 3 traditional ways to reduce a sovereign debt burden of this magnitude, and 2 of them are politically impossible in the United States today. The first option is austerity. This means massive tax hikes and brutal spending cuts. 

To balance the budget and start paying down the debt, the government would have to double income taxes or abolish the U.S. military. Neither of those things is going to happen. Any politician who proposes cutting Social Security checks by 30 percent commits political suicide. Any president who proposes a seventy percent tax rate gets voted out in a landslide. The American economy is addicted to government spending. 

Pulling the plug would trigger a Great Depression instantly. So austerity is off the table. The second option is default. The government could simply walk up to the podium and say, we are not paying. This is what Argentina or Russia has done in the past. But for the United States, the issuer of the global reserve currency, this is the nuclear option.

The entire global financial system, every bank, every pension fund, every trade contract is built on the foundation that US Treasury bonds are risk free. the U.S. defaults, the global banking system collapses overnight. Trade stops, credit cards stop working. It would be a financial apocalypse. So explicit default is also off the table. That leaves only one option. 

The third option, the option that every empire in history, from Rome to Weimar Germany to post-war Britain, has eventually chosen. It is the path of least resistance. It is the soft default. You don’t refuse to pay the debt. You pay every single cent of it, but you pay it back in currency that is worth significantly less than when you borrowed it. You print the difference. This is not a conspiracy theory. 

It is the official, though unspoken, policy of the United States government. It is a process of financial repression, designed to transfer wealth from savers to the state. The goal is to keep the interest rate on the debt lower than the rate of inflation. Let’s do the math. 

If the government owes thirty trillion dollars and inflation is 5 percent, the real value of that debt shrinks by 5 percent every year. In purchasing power terms, the government has just erased one point five trillion of debt in a single year without raising a single tax or cutting a single program. The bondholders get their money back, but that money buys fewer groceries and fewer houses disguised as supply chain issues or transitory inflation.

 We are currently witnessing a historic shift in monetary policy called fiscal dominance. 

For 40 years, the Federal Reserve was the master. It raised interest rates to fight inflation, even if it hurt the economy. Today, the Treasury is the master. The debt is so high that the Fed cannot raise interest rates high enough to truly kill inflation, because doing so would bankrupt the US government. If interest rates went to ten percent, like they did in the 19 eighties, The interest payments on 38 trillion dollars would be 3.8 trillion dollars a year, more than the total tax revenue of the country. 

The government would collapse. So, the Fed is forced to tolerate higher inflation. It is forced to keep rates lower than they should be. It is forced to become an enabler of the Treasury’s spending. The independence of the central bank is dying. We are moving into an era where the money printer is permanently fused to the government budget. 

This is the hidden crisis. It isn’t a sudden crash. It’s a slow boil. The 38 trillion dollar number will keep going up. It will hit forty trillion dollars, then fifty trillion dollars. But the value of the dollar will keep going down. The government is betting that it can inflate away the debt faster than the market can panic.

 It is a dangerous high-wire If they print too slowly, the debt crushes them. If they print too fast, they trigger hyperinflation. They are trying to thread the needle, running inflation at 4 percent or 5 percent for a decade. 

This sounds manageable, but the compound effect is devastating. At 5 percent inflation, the value of your savings is cut in half in 14 years. That is the plan, to wipe out half the value of the national debt and half the value of your savings by the mid20thirties. In the next section, we will break down the specific mechanisms they use to do this. 

We will explain yield curve control, the manipulation of the CPI, Consumer Price Index, and how the banking system is forced to buy government debt that nobody else wants. We will look at the mechanics of the great wealth transfer from Main Street to Washington. 

To understand how the government plans to make thirty eight trillion dollar disappear, you don’t need a crystal ball. You just need a history book. We are not in uncharted territory. We are rerunning the exact economic playbook used by the United States after World War 2. In 19 45, the U.S. debt to GDP ratio hit one hundred and nineteen percent. 

The government didn’t pay it off with taxes. It didn’t default. It liquidated the debt through negative real interest rates. For a decade, the Federal Reserve capped interest rates at 2.5 percent, while inflation averaged over 6 percent. Every year, the bondholders lost 3.5 percent of their purchasing power. This was a deliberate transfer of wealth from savers to the state. Today, this strategy is back. But it has been upgraded with 3 modern tools designed to ensure you do not notice the theft until it asks too late. 

Tool number one, the captive buyer. In a free market, if a government is thirty eight trillion dollars in debt and spending recklessly, investors would demand a higher interest rate to lend them money. They would say, you are a risky borrower. Pay me ten percent. But the U.S. government cannot afford ten percent. So it rigs the market by creating a captive audience through a complex web of banking regulations like Basel III and Dodd-Frank. 

The government forces banks, insurance companies, and pension funds to hold U.S. Treasury bonds. Regulators designate U.S. Treasuries as High Quality Liquid Assets. Banks are legally required to hold these assets to satisfy their liquidity coverage ratios. It doesn’t matter if the bonds pay 0.1 percent or if they are losing value. 

The banks must buy them to stay in business. This creates artificial demand. It forces the financial system to lend money to the government at suppression rates, regardless of the risk. Your pension fund isn’t buying government debt because it’s a good investment. It’s buying it because it’s against the law not to. Tool number 2, the broken compass. If you want to pay people less, but you promise to pay them based on inflation, the easiest solution is to redefine inflation. Social Security payments and TIPS are linked to the Consumer Price Index. 

If CPI is ten percent, the government has to pay out ten percent more. So the government has a multibillion dollar incentive to keep the CPI low. Since the 19 eighties, the methodology for calculating CPI has been quietly rewritten to suppress the official number. They introduced substitution bias. 

The logic is, if the price of steak goes up, you won’t buy steak, you will buy hamburger. Therefore, your cost of living hasn’t gone up as much as the price of steak suggests. The CPI tracks the hamburger, effectively ignoring the fact that your standard of living has dropped. They introduced hedonic adjustments.

 If a new car costs five thousand dollars more than the old model, but it has better safety features, the government argues the price didn’t really go up. The price increase is adjusted down because the quality is higher. These statistical sleights of hand save the government 1000000000. If we use the 1980 methodology today, inflation would consistently be double the official number. The government is gaslighting you about the cost of your own survival to save its budget. Tool number 3, fiscal dominance.

 Finally, we have the central bank put. Historically, the Federal Reserve was independent. Its job was to protect the dollar. Under fiscal dominance, the Fed loses its independence. Its primary job becomes keeping the Treasury solvent. When foreign nations like China or Japan stop buying US debt, which they have started to do, the Fed steps in as the buyer of last resort. It prints money to buy the bonds that nobody else wants. This is quantitative easing, QE. By buying the debt, the Fed artificially suppresses the yield. This keeps the government’s interest bill affordable, but it floods the economy with new dollars. The result is that the stock market goes up, real estate goes up, and the price of assets disconnects from reality. This is the everything bubble. It creates the illusion of wealth. Your 41 K looks higher. Your house value looks higher, it is a monetary mirage. You have more dollars, but those dollars by less than they did ten years ago. 

The government is effectively paying off its debt by diluting your share of the pie. The verdict. The U.S. government is not going to default. It is going to inflate. 

It is going to keep interest rates below the real rate of inflation for the next decade. This is the silent erasure. If you keep your money in a savings account earning 4 percent while real inflation is 8 percent, you are the one paying off the national debt. You are the donor class. The only way to opt out of this system is to own assets that the government cannot print. Serious, direct to camera. 

We’ve talked about how the government uses inflation and regulation to silently seize your wealth. But sometimes, the silent approach isn’t fast enough. When a government gets truly desperate, they stop being subtle.

 In 1933, the United States government did exactly that. They criminalized the ownership of the one asset that allowed citizens to protect themselves from inflation. franklin d roosevelt signed an executive order  seizing the gold of every American citizen under the threat of ten years in prison.

 in the next video we are going to tell the full uncensored story of the great gold seizure we will uncover the secret prosecutions the legal loopholes the wealthy used to escape and the terrifying legal precedent that allows the president to seize your bitcoin gold and for a one k during a national emergency today

The primary engine of the growing inequality that is tearing the United States apart. To understand why, we have to revisit an 18thcentury French economist named Richard Cantillon. He observed a phenomenon that is now known as the Cantillon effect. He realized that where the new money enters the economy matters. 

When the Federal Reserve prints a trillion dollars, they don’t drop it from helicopters over Iowa. They don’t mail a check to every citizen. They inject it into the financial sector. They buy bonds from Goldman Sachs, JP Morgan, and BlackRock. These institutions get the new money first. They get it at 0 interest. They use this free cash to buy assets, stocks, real estate, and technology companies. 

By the time this new money trickles down to the average worker in the form of wages, prices have already risen. The rich get the money before inflation. The poor get the money after inflation.

 This is why, since 2008, we have seen a K-shaped economy. The asset-owning class, the top ten percent, has seen their wealth explode because the Fed is pumping up the value of their stocks and homes. 

The wage-earning class, the bottom 90 percent, has seen their purchasing power collapse because their wages cannot keep up with the price of rent and groceries. The national debt is effectively being paid off by liquidating the American middle class. 

The end of the risk-free era. This dynamic is forcing a fundamental change in how we must think about saving.

 For the last 40 years, the standard advice was work hard, save ten percent of your income, put it in a bank, and buy government bonds. This was the 6040 portfolio. It was designed for a world where money held its value in a world of fiscal dominance. This advice is financial suicide.If you save in cash, you are guaranteed to lose. If you buy government bonds, you are guaranteed to lose purchasing power. 
We are entering an era of forced speculation. To simply preserve your wealth, you are forced to take risks. You have to buy stocks, real estate or crypto just to outrun the devaluation of the currency. The government has turned the entire economy into a casino where you must gamble to survive because the safe option, saving, is being deliberately destroyed. 
The endgame, CBDCs. But the final tool in the government’s arsenal has not been deployed yet.
 It is currently being built in the basement of the Federal Reserve. It is the central bank digital currency, CBDC. Right now, the government’s ability to manipulate the economy is limited by physical cash. If the Fed sets interest rates to 5 percent, to wipe out the debt faster, You would simply pull your cash out of the bank and hide it under your mattress to avoid the penalty. Physical cash is the ultimate check on government power. It allows you to exit the banking system. 
A CBDC removes that exit. If the dollar becomes purely digital, the Federal Reserve gains total control.
 They can implement negative interest rates instantly.
 They can deduct one percent from your balance every month to force you to spend. 
They can implement expiry dates on money, telling you that your stimulus check must be spent within 30 days or it vanishes. 
This is not science fiction. It is already being tested in China with the digital yuan. digital dollar is the ultimate solution to the debt crisis.
 It gives the state the power to micromanage the velocity of money and confiscate wealth with a few lines of code. 
The transition to a cashless society is not about convenience. It is about control. It is about ensuring that there is no escape valve when the great wealth transfer accelerates. The verdict. The United States is defaulting. It is a slow, polite and bureaucratic default, but it is a default nonetheless. 

The thirty eight trillion dollars will never be paid back in real terms. The winners will be those who own scarce assets, real estate, gold, Bitcoin, profitable businesses, things that cannot be printed. The losers will be those who trust the currency and the institutions. 
The American dream of saving your way to prosperity is dead. We are now in the game of asset survival.
 We’ve discussed how the government uses inflation and digital control to slowly seize your wealth.
 But history shows that when a government gets truly desperate, they stop being subtle. They stop asking. They simply take. 
In 19 33, the United States government, the land of the free, did exactly that. They criminalized the ownership of the one asset that allowed citizens to protect themselves from inflation—GOLD!