If I'm remembering long-ago reading on the topic, 5% is near the point at which interest service on debts exceeds all government revenue (once enough of bonds have turned over at this interest rate to actually be the effective rate being paid out on the population of 10-year T-bills.)
What is the way to interpret this situation as other than a 10 year countdown to chaos? Hope that we reign in spending in a drastic, unprecedented way (without impacting revenue as well...)? From where I'm sitting, once the debt service exceeds revenue, we'll have to get in a big war, destabilize domestic affairs with tax hikes (which are unlikely to work, based on Laffer curve), or cease to pretend that the US currency is a stable trading platform. I guess the third option seems alright for the rest of the world, except no one else's seems to be particularly appealing.
What is the way to interpret this situation as other than a 10 year countdown to chaos? Hope that we reign in spending in a drastic, unprecedented way (without impacting revenue as well...)? From where I'm sitting, once the debt service exceeds revenue, we'll have to get in a big war, destabilize domestic affairs with tax hikes (which are unlikely to work, based on Laffer curve), or cease to pretend that the US currency is a stable trading platform. I guess the third option seems alright for the rest of the world, except no one else's seems to be particularly appealing.