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Fed Rate-Hikes Will Add Trillions To National Debt

Fed Rate-Hikes Will Add Trillions To National Debt

Authored by Michael Maharrey via SchiffGold.com,

Federal Reserve rate hikes will add trillions…

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Fed Rate-Hikes Will Add Trillions To National Debt

Authored by Michael Maharrey via SchiffGold.com,

Federal Reserve rate hikes will add trillions to the national debt, according to an analysis by the Committee for a Responsible Federal Budget.

The Fed delivered another 75-basis point rate-hike during its September FOMC meeting this afternoon and made it clear that rates will be 'higher for longer' to fight persistently high inflation. According to the Committee for a Responsible Budget (CFRB), rate hikes will add another $2.1 trillion to the national debt over the next decade.

The debt current stands at $30.9 trillion.

Every increase in interest rate raises the federal government’s interest expense. So far in fiscal 2022, the US Treasury has forked out $471 billion just to fund the government’s interest payments.

To put that number into context, at this point in fiscal 2021 the Treasury’s interest expense stood at $356 billion. That represents a 30%  year-on-year increase. Interest expense ranks as the sixth largest budget expense category, about $250 billion below Medicare. If interest rates remain elevated or continue rising, interest expenses could climb rapidly into the top three federal expenses. (You can read a more in-depth analysis of the national debt HERE.)

According to the Congressional Budget Office, this is exactly what will happen. It projects interest payments will triple from nearly $400 billion in fiscal 2022 to $1.2 trillion in 2032. And it’s worse than that. The CBO made this estimate in May. Interest rates are already higher than those used in its analysis.

In a statement to Fox Business, the CFRB concedes that rate hikes are necessary in this inflationary environment. It places the onus on the federal government to get its spending under control.

Policymakers can help the Fed by limiting the need for rate hikes with fiscal policy that pushes inflation in the right direction. That means not enacting legislation and executive orders like student loan forgiveness that have ballooned deficits and only made demand pressures worse.”

Even with pandemic-era spending programs expiring, the federal government continues to spend about half-a-trillion dollars every single month. In August alone, the Biden administration blew through another $523.3 billion. This brought total spending for fiscal 2022 to just over $5.35 trillion.

There is no indication spending will slow anytime soon. While federal outlays have fallen compared to last year as pandemic programs wound down, the US government is still handing out COVID stimulus and it wants more.  Congress recently pushed through another massive spending bill. Meanwhile, the US continues to shower money on Ukraine and other countries around the world. And we haven’t begun to see the impact of student loan forgiveness.

paper published by the Kansas City Federal Reserve Bank acknowledged that the central bank can’t slay inflation unless the US government gets its spending under control. In a nutshell, the authors argue that the Fed can’t control inflation alone. US government fiscal policy contributes to inflationary pressure and makes it impossible for the Fed to do its job.

Trend inflation is fully controlled by the monetary authority only when public debt can be successfully stabilized by credible future fiscal plans. When the fiscal authority is not perceived as fully responsible for covering the existing fiscal imbalances, the private sector expects that inflation will rise to ensure sustainability of national debt. As a result, a large fiscal imbalance combined with a weakening fiscal credibility may lead trend inflation to drift away from the long-run target chosen by the monetary authority.”

This clearly isn’t in the cards.

“As interest rates rise and the nation’s debt grows, it will become even more expensive to borrow in the future. Congresses and presidents of both parties, over many years, have avoided making hard choices about our budget and failed to put it on a sustainable path. It is vital for lawmakers to take action on the growing debt to ensure a stable economic future,” the Peter Peterson Foundation said.

Interest expense isn’t the only problem the Fed’s inflation fight creates for the US government. Along with raising rates, the Fed is shrinking its balance sheet. That means it’s not buying Treasury bonds. The federal government needs the central bank to continue buying Treasuries in order to prop up the market and enable its borrowing. Without the Fed’s intervention in the bond market, prices will tank, driving interest rates on US debt even higher.

Something has to give.

The Fed can’t simultaneously fight inflation and prop up Uncle Sam’s spending spree. Either the government will have to cut spending or the Fed will have to keep creating money out of thin air in order to monetize the debt.

You can decide for yourself which scenario you find more likely.

Tyler Durden Wed, 09/21/2022 - 15:30

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We can turn to popular culture for lessons about how to live with COVID-19 as endemic

As COVID-19 transitions from a pandemic to an endemic, apocalyptic science-fiction and zombie movies contain examples of how to adjust to the new norm…

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An endemic means that COVID-19 is still around, but it no longer disrupts everyday life. (Shutterstock)

In 2021, conversations began on whether the COVID-19 pandemic will, or even can, end. As a literary and cultural theorist, I started looking for shifts in stories about pandemics and contagion. It turns out that several stories also question how and when a pandemic becomes endemic.


Read more: COVID will likely shift from pandemic to endemic — but what does that mean?


The 2020 film Peninsula, a sequel to the Korean zombie film, Train to Busan, ends with a group of survivors rescued and transported to a zombie-free Hong Kong. In it, Jooni (played by Re Lee) spent her formative years living through the zombie epidemic. When she is rescued, she responds to being informed that she’s “going to a better place” by admitting that “this place wasn’t bad either.”

Jooni’s response points toward the shift in contagion narratives that has emerged since the spread of COVID-19. This shift marks a rejection of the push-for-survival narratives in favour of something more indicative of an endemic.

Found within

Contagion follows a general cycle: outbreak, epidemic, pandemic and endemic. The determinants of each stage rely upon the rate of spread within a specified geographic region.

Etymologically, the word “endemic” has its origins with the Greek words én and dēmos, meaning “in the people.” Thus, it refers to something that is regularly found within a population.

Infectious disease physician Stephen Parodi asserts that an endemic just means that a disease, while still prevalent within a population, no longer disrupts our daily lives.

Similarly, genomics and viral evolution researcher Aris Katzourakis argues that endemics occur when infection rates are static — neither rising nor falling. Because this stasis occurs differently with each situation, there is no set threshold at which a pandemic becomes endemic.

Not all diseases reach endemic status. And, if endemic status is reached, it does not mean the virus is gone, but rather that things have become “normal.”

Survival narratives

We’re most likely familiar with contagion narratives. After all, Steven Soderbergh’s 2011 film Contagion, was the most watched film on Canadian Netflix in March 2020. Conveniently, this was when most Canadian provinces went into lockdown during the early stages of the COVID-19 pandemic.

A clip from the film Contagion showing the disease spreading throughout the world.

In survival-based contagion narratives, characters often discuss methods for survival and generally refer to themselves as survivors. Contagion chronicles the transmission of a deadly virus that is brought from Hong Kong to the United States. In response, the U.S. Centers for Disease Control is tasked with tracing its origins and finding a cure. The film follows Mitch Emhoff (Matt Damon), who is immune, as he tries to keep his daughter safe in a crumbling Minneapolis.

Ultimately, a vaccine is successfully synthesized, but only after millions have succumbed to the virus.

Like many science fiction and horror films that envision some sort of apocalyptic end, Contagion focuses on the basic requirements for survival: shelter, food, water and medicine.

However, it also deals with the breakdown of government systems and the violence that accompanies it.

A “new” normal

In contrast, contagion narratives that have turned endemic take place many years after the initial outbreak. In these stories, the infected population is regularly present, but the remaining uninfected population isn’t regularly infected.

A spin-off to the zombie series The Walking Dead takes place a decade after the initial outbreak. In the two seasons of The Walking Dead: World Beyond (2020-2021) four young protagonists — Hope (Alexa Mansour), Iris (Aliyah Royale), Silas (Hal Cumpston) and Elton (Nicolas Cantu) — represent the first generation to come of age within the zombie-infested world.

The four youth spent their formative years in an infected world — similar to Jooni in Peninsula. For these characters, zombies are part of their daily lives, and their constant presence is normalized.

The trailer for the second season of AMC’s The Walking Dead: World Beyond.

The setting in World Beyond has electricity, helicopters and modern medicine. Characters in endemic narratives have regular access to shelter, food, water and medicine, so they don’t need to resort to violence over limited resources. And notably, they also don’t often refer to themselves as survivors.

Endemic narratives acknowledge that existing within an infected space alongside a virus is not necessarily a bad thing, and that not all inhabitants within infected spaces desire to leave. It is rare in endemic narratives for a character to become infected.

Instead of going out on zombie-killing expeditions in the manner that occurs frequently in the other Walking Dead stories, the characters in World Beyond generally leave the zombies alone. They mark the zombies with different colours of spray-paint to chronicle what they call “migration patterns.”

The zombies have therefore just become another species for the characters to live alongside — something more endemic.

The Walking Dead, Fear the Walking Dead (2015-), Z Nation (2014-18), and many other survival-based stories seem to return to the past. In contrast, endemic narratives maintain a present and sometimes even future-looking approach.

Learning from stories

According to film producer and media professor Mick Broderick, survival stories maintain a status quo. They seek a “nostalgically yearned-for less-complex existence.” It provides solace to imagine an earlier, simpler time when living through a pandemic.

However, the shift from survival to endemic in contagion narratives provides us with many important possibilities. The one I think is quite relevant right now is that it presents us with a way of living with contagion. After all, watching these characters survive a pandemic helps us imagine that we can too.

Krista Collier-Jarvis does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Xi Reemerges In 1st Public Appearance After ‘Coup’ Rumors

Xi Reemerges In 1st Public Appearance After ‘Coup’ Rumors

So much for the "coup in China" and "Xi is missing" rumor mill of the past week,…

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Xi Reemerges In 1st Public Appearance After 'Coup' Rumors

So much for the "coup in China" and "Xi is missing" rumor mill of the past week, which at one point saw Chinese President Xi Jinping's name trending high on Twitter...

"Chinese President Xi Jinping visited an exhibition in Beijing on Tuesday, according to state television, in his first public appearance since returning to China from an official trip to Central Asia in mid-September – dispelling unverified rumours that he was under house arrest."

He had arrived in Samarkand, Uzbekistan on September 15 - and attended the days-long Shanghai Cooperation Organization (SCO) summit - where he met with Russian President Vladimir Putin, among others.

Xi is "back"...image via state media screenshot

Importantly, it had been his first foreign trip in two years. Xi had not traveled outside of the country since before the Covid-19 pandemic began.

But upon returning the Beijing, he hadn't been seen in the public eye since that mid-September trip, fueling speculation and rumors in the West and on social media. Some pundits floated the idea that he had been under "house arrest" amid political instability and a possible coup attempt.

According to a Tuesday Bloomberg description of the Chinese leader's "re-emergence" in the public eye, which has effectively ended the bizarre rumors

Xi, wearing a mask, visited an exhibition in Beijing on Tuesday about China's achievements over the past decade, state-run news outlet Xinhua reported. The Chinese leader was accompanied by the other six members of the Politburo Standing Committee, a sign of unity after rumors circulated on Twitter about a challenge to his power.

He'll likely cinch his third five-year term as leader at the major Chinese Communist party’s (CCP) meeting on October 16. The CCP meeting comes only once every half-decade.

What had added to prior rumors was the fact that the 69-year old Xi recently undertook a purge of key senior security officials. This included arrests on corruption charges of the former police chiefs of Shanghai, Chongqing and Shanxi.

More importantly, former vice minister of public security Sun Lijun and former justice minister Fu Zhenghua were also sacked and faced severe charges.

Concerning Sun Lijun, state media made this shocking announcement a week ago: "Sun Lijun, former Chinese vice minister of public security, was sentenced to death with a two-year reprieve for taking more than 646 million yuan of bribes, manipulating the stock market, and illegally possessing firearms, according to the Intermediate People's Court of Changchun in Northeast China's Jilin Province on Friday." The suspended death sentence means he'll spend life in prison.

Tyler Durden Wed, 09/28/2022 - 14:05

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Did the pandemic change our personalities?

Despite a long-standing hypothesis that personality traits are relatively impervious to environmental pressures, the COVID-19 pandemic may have altered…

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Despite a long-standing hypothesis that personality traits are relatively impervious to environmental pressures, the COVID-19 pandemic may have altered the trajectory of personality across the United States, especially in younger adults, according to a new study published this week in the open-access journal PLOS ONE by Angelina Sutin of Florida State University College of Medicine, and colleagues.

Credit: Brian Merrill, Pixabay, CC0 (https://creativecommons.org/publicdomain/zero/1.0/)

Despite a long-standing hypothesis that personality traits are relatively impervious to environmental pressures, the COVID-19 pandemic may have altered the trajectory of personality across the United States, especially in younger adults, according to a new study published this week in the open-access journal PLOS ONE by Angelina Sutin of Florida State University College of Medicine, and colleagues.

Previous studies have generally found no associations between collective stressful events—such as earthquakes and hurricanes—and personality change. However, the coronavirus pandemic has affected the entire globe and nearly every aspect of life.

In the new study, the researchers used longitudinal assessments of personality from 7,109 people enrolled in the online Understanding America Study. They compared five-factor model personality traits—neuroticism, extraversion, openness, agreeableness and conscientiousness—between pre-pandemic measurements (May 2014 – February 2020) and assessments early (March – December 2020) or later (2021-2022) in the pandemic. A total of 18,623 assessments, or a mean of 2.62 per participant, were analyzed. Participants were 41.2% male and ranged in age from 18 to 109.

Consistent with other studies, there were relatively few changes between pre-pandemic and 2020 personality traits, with only a small decline in neuroticism. However, there were declines in extraversion, openness, agreeableness, and conscientiousness when 2021-2022 data was compared to pre-pandemic personality. The changes were about one-tenth of a standard deviation, which is equivalent to about one decade of normative personality change. The changes were moderated by age, with younger adults showing disrupted maturity in the form of increased neuroticism and decreased agreeableness and conscientiousness, and the oldest group of adults showing no statistically significant changes in traits.

The authors conclude that if these changes are enduring, it suggests that population-wide stressful events can slightly bend the trajectory of personality, especially in younger adults.

The authors add: “There was limited personality change early in the pandemic but striking changes starting in 2021. Of most note, the personality of young adults changed the most, with marked increases in neuroticism and declines in agreeableness and conscientiousness. That is, younger adults became moodier and more prone to stress, less cooperative and trusting, and less restrained and responsible.”

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In your coverage please use this URL to provide access to the freely available article in PLOS ONE: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0274542

Citation: Sutin AR, Stephan Y, Luchetti M, Aschwanden D, Lee JH, Sesker AA, et al. (2022) Differential personality change earlier and later in the coronavirus pandemic in a longitudinal sample of adults in the United States. PLoS ONE 17(9): e0274542. https://doi.org/10.1371/journal.pone.0274542

Author Countries: USA, France

Funding: Research reported in this publication was supported by the National Institute on Aging of the National Institutes of Health under Award Number R01AG053297 to ARS. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.


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