We’ve been hearing about impending chaos for more than a decade because the US is out-spending its growth rate. But markets continue to go up, houses go up, politicians get re-elected, and life is good (over the past 30 years). The end.

By that I mean the days of us not having to worry about living beyond our means as a society – are over.

Assuming interest rates stay at historically low levels, we’re looking at reaching the point (probably around year 2017) that interest payments on the national debt equal GDP growth rates. That means we will not be able to pay the debt off unless we cut programs. Ever met a politician capable of cutting? Me neither. Once you bring reality into the equation (higher interest rates eventually, and lower GDP growth), we’re likely to hit that point in 2015 or 2016 – about the same time that Social Security begins spending more than it brings in.  We will only be able to conceal this inconvenient truth from our creditors for so long.