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Debt Ceiling Drama

Without a basic level of trust regarding the intentions and expected behavior of other human beings, our modern civilization would very quickly disintegrate…



“Trust is the foundation of society. Without a basic level of trust regarding the intentions and expected behavior of other human beings, our modern civilization would very quickly disintegrate into total chaos.”

— The Paradox of Trust, October 31, 2019

Charlie Munger often talks about the benefits of living within a seamless web of deserved trust. In such a system, it is unnecessary to take protective steps when dealing with others. You can let your guard down and focus on positive interactions and relationships. For most people, the best that we can hope for is to have a close circle of family and friends who can be trusted unconditionally.

It is rare to live within a system of unquestionable trust, but social conventions develop over long periods of time that make it possible to have a baseline level of trust that facilitates business and personal relationships. This is the type of trust that I was thinking about a few years ago when I wrote about trust being the foundation of society. At the time, I had no idea that our world would soon be upended by the pandemic. Our society lost much of its baseline level of trust over the past three years.

It is difficult enough to build trust personally and within a society at a moment in time. Building trust within society over multiple generations and even over multiple centuries is an extraordinarily rare accomplishment.

In recent weeks, there have been countless articles about the possibility of the United States defaulting on the national debt. The focus is typically on the dire consequences of missing interest and principal payments on treasury securities. Failing to make payments as called for would represent a violation of the contractual terms of debt and would be a serious development. However, even if there is some delay, there is virtually no chance that debt holders will suffer any permanent loss of capital. 

The real casualty of missing payments on the national debt is trust. Any government that has the privilege of being able to issue debt in its own fiat currency has the capacity to make payments on the debt. The choice of not doing so is a political act, one that is more of a repudiation of trust than a repudiation of a financial obligation.

Missing payments on contractual obligations like treasury securities is an obvious breach of trust. However, failing to make payments authorized by law is also a serious violation of trust. Legislation passed by Congress and signed by the President received a seal of approval that should only be rescinded with new legislation. If Congress passes budgets that are not fully funded with tax revenue, the obvious implication is that the executive branch must issue debt to satisfy the legislation. 

There is much talk about whether the Department of the Treasury should prioritize payments on the national debt over other spending. From a contractual perspective, this can be justified. However, many observers consider prioritization to represent a “technical default” due to failure to make other payments authorized by law. This could result in a credit rating downgrade but, more importantly, an erosion of trust.

In a well-functioning system, Congress would debate tax and spending policy as part of a carefully designed annual budget process. In reality, much of the spending of the federal government is on autopilot. This is particularly true for entitlement programs such as Social Security and Medicare. Many Social Security beneficiaries are under the false impression that the system is funded by taxes they paid during their working years. I am sure that most beneficiaries consider their payments to be “contractual” even though benefit levels are subject to change at any time by Congress. 

You cannot maintain trust if you do not have a predictable system. Contractual obligations should never be questioned, nor should quasi-contractual obligations be questioned without extensive debate, transparency, and time to adjust to changes.

With very few exceptions, the federal government has failed to operate with a balanced budget. The pandemic spending exploded the deficit to levels not seen since the Second World War when measured as a percentage of Gross Domestic Product:

Source: St. Louis Fed

Whether you agree with the pandemic era spending or not, the reality is that the United States had massive capacity to borrow only due to an equally massive level of trust that treasury obligations are sacrosanct and contractual terms will be satisfied. 

Does the United States have a spending problem? There is no question that debt as a percentage of Gross Domestic Product has skyrocketed in recent years:

Source: St. Louis Fed

It is remarkable that debt has reached such heights with interest rates at still at relatively low levels. Again, a major reason that the federal government can borrow at very low rates is due to trust that contractual obligations will be satisfied and that the government will not choose to inflate its way out of debt. Our recent bout of inflation has been tolerated by investors but we are already pushing our luck.

We find ourselves in a bizarre two-track system. Congress routinely passes legislation that is not fully funded with tax revenue, with the obvious implication that debt must be issued to make up the shortfall. However, the implied debt is not authorized along with spending legislation. Instead, we face the periodic drama of whether Congress will raise the debt ceiling. The main beneficiaries of this exercise are politicians who can vote for deficit spending while also voting against raising the debt ceiling. 

Everyone has their own personal opinion regarding government spending and the overall size of the federal government. My opinion is that the federal spending is out of control and that each and every category of spending, both “discretionary” and “non-discretionary”, must be on the table during the annual budget cycle. 

Congress has the power of the purse and can refuse to authorize spending during the annual budget cycle. If the President and Congress cannot agree on annual spending, parts of the government will not be funded until agreement can be reached. This is a proper part of the give and take of government. What is improper is to authorize spending as part of a budget cycle and then fail to authorize the implied debt required to satisfy the budget. All this does is erode trust in society.

I am not naive and understand that the debt ceiling has been a potent tool for fiscal conservatives to compel concessions from politicians who are more inclined to favor a larger federal government. As a negotiating tool, this strategy has worked to contain spending in the past and perhaps it will work again this time. However, political wins using this method are not free. The price that will be paid is erosion of trust in the system, especially if obligations authorized by law are not satisfied, even briefly.

Trust takes a long time to build up and can be destroyed quickly. The United States has built a deep reservoir of trust over the past 236 years which has permitted much abuse by politicians of both parties. This reservoir is not an unlimited resource. We should not assume that loss of trust in the system will be linear. Trust in society was already seriously impaired prior to the pandemic and suffered massive blows over the past three years. No one knows how many additional blows the system can take or where the line is between erosion and total collapse.

Copyright, Disclosures, and Privacy Information

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World Bank: Global Economic Growth Expected To Slow To 2008 Levels

World Bank: Global Economic Growth Expected To Slow To 2008 Levels

Authored by Michael Maharrey via,

Most people in the mainstream…



World Bank: Global Economic Growth Expected To Slow To 2008 Levels

Authored by Michael Maharrey via,

Most people in the mainstream concede that the economy is heading for a recession, but the consensus seems to be that downturn will be short and shallow. Projections by the World Bank undercut that optimism.

According to the World Bank, global growth in 2023 will slow to the lowest level since the 2008 financial crisis.

In other words, the World Bank is predicting the beginning of Great Recession 2.0.

You might recall that the Great Recession was neither short nor shallow.

In fact, World Bank Group chief economist and senior vice president Indermit Gill said, “The world economy is in a precarious position.”

According to the World Bank’s new Global Economic Prospects report, global growth is projected to decelerate to 2.1% this year, falling from 3.1% in 2022. The bank forecasts a significant slowdown during the last half of this year.

That would match the global growth rate during the 2008 financial crisis.

According to the World Bank, higher interest rates, inflation, and more restrictive credit conditions will drive the economic downturn.

The report forecasts that growth in advanced economies will slow from 2.6% in 2022 to 0.7% this year and remain weak in 2024.

Emerging market economies will feel significant pain from the economic slowdown. Yahoo Finance reported, “Higher interest rates are a problem for emerging markets, which already were reeling from the overlapping shocks of the pandemic and the Russian invasion of Ukraine. They make it harder for those economies to service debt loans denominated in US dollars.”

The World Bank report paints a bleak picture.

The world economy remains hobbled. Besieged by high inflation, tight global financial markets, and record debt levels, many countries are simply growing poorer.”

Absent from the World Bank analysis is any mention of how more than a decade of artificially low interest rates and trillions of dollars in quantitative easing by central banks created the wave of inflation that continues to sweep the globe, along with massive levels of debt and all kinds of economic bubbles.

If you listen to the mainstream narrative, you would think inflation just came out of nowhere, and central banks are innocent victims nobly struggling to save the day by raising interest rates. Pundits fret about rising rates but never mention that rates were only so low for so long because of the actions of central banks. And they seem oblivious to the consequences of those policies.

But being oblivious doesn’t shield you from the impact of those consequences.

In reality, central banks and governments implemented policies intended to incentivize the accumulation of debt. They created trillions of dollars out of thin air and showered the world with stimulus, unleashing the inflation monster. And now they’re trying to battle the dragon they set loose by raising interest rates. This will inevitably pop the bubble they intentionally blew up. That’s why the World Bank is forecasting Great Recession-era growth. All of this was entirely predictable.

After all, artificially low interest rates are the mother’s milk of a global economy built on easy money and debt. When you take away the milk, the baby gets hungry. That’s what’s happening today. With interest rates rising, the bubbles are starting to pop.

And it’s probably going to be much worse than most people realize. There are more malinvestments, more debt, and more bubbles in the global economy today than there were in 2008. There is every reason to believe the bust will be much worse today than it was then.

In other words, you can strike “short” and “shallow” from your recession vocabulary.

Even the World Bank is hinting at this.

Tyler Durden Wed, 06/07/2023 - 15:20

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DNAmFitAge: Biological age indicator incorporating physical fitness

“We expect DNAmFitAge will be a useful biomarker for quantifying fitness benefits at an epigenetic level and can be used to evaluate exercise-based interventions.”…



“We expect DNAmFitAge will be a useful biomarker for quantifying fitness benefits at an epigenetic level and can be used to evaluate exercise-based interventions.”

Credit: 2023 McGreevy et al.

“We expect DNAmFitAge will be a useful biomarker for quantifying fitness benefits at an epigenetic level and can be used to evaluate exercise-based interventions.”

BUFFALO, NY- June 7, 2023 – A new research paper was published in Aging (listed by MEDLINE/PubMed as “Aging (Albany NY)” and “Aging-US” by Web of Science) Volume 15, Issue 10, entitled, “DNAmFitAge: biological age indicator incorporating physical fitness.”

Physical fitness is a well-known correlate of health and the aging process and DNA methylation (DNAm) data can capture aging via epigenetic clocks. However, current epigenetic clocks did not yet use measures of mobility, strength, lung, or endurance fitness in their construction. 

In this new study, researchers Kristen M. McGreevy, Zsolt Radak, Ferenc Torma, Matyas Jokai, Ake T. Lu, Daniel W. Belsky, Alexandra Binder, Riccardo E. Marioni, Luigi Ferrucci, Ewelina Pośpiech, Wojciech Branicki, Andrzej Ossowski, Aneta Sitek, Magdalena Spólnicka, Laura M. Raffield, Alex P. Reiner, Simon Cox, Michael Kobor, David L. Corcoran, and Steve Horvath from the University of California Los Angeles, University of Physical Education, Altos Labs, Columbia University Mailman School of Public Health, University of Hawaii, University of Edinburgh, National Institute on Aging, Jagiellonian University, Pomeranian Medical University in Szczecin, University of Łódź, Central Forensic Laboratory of the Police in Warsaw, Poland, University of North Carolina at Chapel Hill, University of Washington, and University of British Columbia develop blood-based DNAm biomarkers for fitness parameters including gait speed (walking speed), maximum handgrip strength, forced expiratory volume in one second (FEV1), and maximal oxygen uptake (VO2max) which have modest correlation with fitness parameters in five large-scale validation datasets (average r between 0.16–0.48). 

“These parameters were chosen because handgrip strength and VO2max provide insight into the two main categories of fitness: strength and endurance [23], and gait speed and FEV1 provide insight into fitness-related organ function: mobility and lung function [8, 24].”

The researchers then used these DNAm fitness parameter biomarkers with DNAmGrimAge, a DNAm mortality risk estimate, to construct DNAmFitAge, a new biological age indicator that incorporates physical fitness. DNAmFitAge was associated with low-intermediate physical activity levels across validation datasets (p = 6.4E-13), and younger/fitter DNAmFitAge corresponds to stronger DNAm fitness parameters in both males and females. 

DNAmFitAge was lower (p = 0.046) and DNAmVO2max is higher (p = 0.023) in male body builders compared to controls. Physically fit people had a younger DNAmFitAge and experienced better age-related outcomes: lower mortality risk (p = 7.2E-51), coronary heart disease risk (p = 2.6E-8), and increased disease-free status (p = 1.1E-7). These new DNAm biomarkers provide researchers a new method to incorporate physical fitness into epigenetic clocks.

“Our newly constructed DNAm biomarkers and DNAmFitAge provide researchers and physicians a new method to incorporate physical fitness into epigenetic clocks and emphasizes the effect lifestyle has on the aging methylome.”

Read the full study: DOI: 

Corresponding Authors: Kristen M. McGreevy, Zsolt Radak, Steve Horvath

Corresponding Emails:,, 

Keywords: epigenetics, aging, physical fitness, biological age, DNA methylation

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About Aging-US:

Launched in 2009, Aging publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.

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Martha Stewart Has a Spicy Take on Americans Who Want to Work From Home

This half-baked take might need to stay in the oven a little longer.



Lifestyle icon Martha Stewart has been on a roll when it comes to representing vivacious women over 60. Whether she's teaming up to charm audiences alongside her BFF Snoop Dogg, poking fun at Elon Musk, or starring as Sports Illustrated's Swimsuit Issue cover model, Martha stays busy. 

Her most recent publicity moment, however, doesn't have the same wholesome feeling Stewart brings to the table. In an interview with Footwear News, the DIY-queen had some choice words about Americans who want to continue working from home after covid-19 lockdown shut down offices.

“You can’t possibly get everything done working three days a week in the office and two days remotely," the cozy-home guru said. "Look at the success of France with their stupid … you know, off for August, blah blah blah. That’s not a very thriving country. Should America go down the drain because people don’t want to go back to work?”

Well, that's certainly a viewpoint. A lot to unpack there. Many online were confused--after all, didn't Stewart basically make her career by "working from home?"

Sitting down with The Today Show, Stewart elaborated on her controversial stance. It seems she's confusing "work from home" with a three-day workweek. 

"I'm having this argument with so many people these days. It's just that my kind of work is very creative and is very collaborative. And I cannot really stomach another zoom. [...But] I hate going to an office, it's empty. During COVID I took every precaution. We [...] set up an office at [...] my home[...] Now we're our offices and our three day work week, I just don't agree with it," Stewart tells viewers. 

"It's frightening because if you read the economic news and look at what's happening everywhere in the world, a three-day workweek doesn't get the work done, doesn't get the productivity up. It doesn't help with the economy and I think that's very important."

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