As the US faces default on $31 trillion in debt, the case for bitcoin strengthens

This is an opinion editorial by content creator and small business owner Robert Hall.

If you follow American politics, you understand that the country is on the brink of defaulting on its massive $31 trillion debt,

The crux of the issue is that In one corner are the Republicans, who control the House of Representatives. With a 222 to 213 majority. in the other corner, US Senate And the White House, under Joe Biden, is controlled by Democrats.

Both the parties are against each other’s will. Republicans want significantly cut costs To extend the loan limit for one year. Democrats want A “Clean” Debt Limit Bill Passed Without Preconditions, As you can see, the starting positions of the two sides are not adjacent to each other. Eventually, it turned into a game of chicken based on who would blink first. It’s all very tiring.

Is this the way to run the government? It is absolutely insane that these leaders would risk defaulting on money already spent. It’s like you or I took out a credit card, went crazy buying all kinds of stuff, and didn’t make the monthly payment at the end of the month.

The government has long been able to run the debt because it has willing participants such as pension funds, hedge funds, sovereign wealth funds and regular Joes, who bought Treasury bills and lent them money because they believed they would be repaid. back with interest.

This has been happening for a long time, but now due to their willpower, questions are being raised on whether this system is running in the Congress or not.

seriously broke

Are these politicians so disconnected from reality that they think that, once the debt ceiling is breached and people stop making their payments, people will go back to lending them money?

If they do, they will demand even higher interest rates. The rates we have now, the government cannot even afford! What happens if the cost of borrowing for the government goes up to 10% or 15%? Nothing is getting funded; That much I can tell you.

check it out, The federal government spent a record $475 billion in fiscal year 2022 on interest payments. Interest costs increased by 30% last year and are expected to increase by another 35% this year, according to the Congressional Budget Office (CBO)’s own estimates!

The CBO estimates that the federal government will spend $640 billion in interest payments this year alone. Is this debt spiral that james lavish Talking lately? It sure sounds like hell to me.

We are on a slow collision course with the economic reality that you can’t print money and borrow without consequences. First inflation raises its ugly head, and then people realize that the money they are being paid back has lost its purchasing power. Once people realize they are losing money when they loan it to the federal government, it’s game over.

This debt-limit debate will expose the federal government’s laxity and inability to keep its promises. That’s what amazes me about politicians on both sides of the aisle.

Do they really want to show this level of incompetence to the world? It’s like watching your family fight in the front yard. It’s embarrassing as hell and your neighbors’ perception of your family will change.

A loan default would change the perception of America from a reliable payer to a debt addict who is unable to pay his debts.

How is the default good for bitcoin?

The silver lining to this whole debt-limiting debacle is that it’s going to throw rocket fuel at bitcoin’s price. As people see that their money is no longer “safe” with the federal government, they will seek alternatives to US Treasuries. Undoubtedly, some of the dollars that would have been earmarked for Treasuries will flow into bitcoin.

New entrants to bitcoin will find that this is the safe haven asset they have been looking for all along. There is no counterparty risk and the supply cannot be reduced.

during Final Controversial Debate on Debt Ceiling, Under the Obama administration, the price of bitcoin went from $13 and ended the year at $755. It also reached an all-time high of $1,163 that year. Chance? Maybe, but it makes sense for people to protect their money in times of a potential disaster such as default.

So, I say to the politicians running the government now: go ahead and keep playing this game. To default or not to default because, in the end, it doesn’t matter; you still lose You have led the world to ruin, and it is up to Bitcoin to save humanity from itself. The debt-maxing debacle only hastens the inevitable.

And to bitcoiners: keep stacking them up like your life depended on it, because one day they might be.

This is a guest post by Robert Hall. The opinions expressed are solely his own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.