Is a Great American Bankruptcy Coming? - The American Spectator | USA News and PoliticsThe American Spectator | USA News and Politics

In the current fiscal year , the U.S. Treasury needs to roll (that is, refinance) about $9 trillion of the current $34 trillion national debt and also finance an additional current deficit of $2 trillion .

Anyone who survived the 1974-75 “stagflation” experience knows exactly what could potentially go wrong.

The only future source of funding for these liabilities will be via the Treasury bond market.

If the Fed becomes trapped into providing the funding needs of the federal government, using the short end of the Treasury market, then the Fed will be significantly restricted in its ability to raise interest rates to deal with inflation issues.

That movie was played out in post-World War I Germany in 1922-23 — and we know how that movie ended.