The Point of No Return is October 1, 2028

In my opinion, the Point of No Return is October 1, 2028.  Why?  And what does this mean?

First, that date starts a new fiscal year 2029 for the US Government.  It will be a transition year, with the new President (Jill Biden?) sworn in on January 20, 2029, and during the transition year, nobody takes responsibility.  The old President sets the budget but isn't around to implement it, and the new President says that isn't his fault.  (This is assuming there is a change in Presidents, which is likely).  So expect a surge of spending in FY 2029.

Second, on this date the Debt Held by the Public will exceed 100% of GDP.  The GDP is currently $25.5 trillion and the Debt Held by the Public is currently $24.6 trillion, so the current ratio is 96.5%.  (The 100% ratio will actually be reached before this, maybe as soon as 2026, but it will for sure reach 100% by that date).

Third, and most important, the amount of net interest paid will exceed $1 trillion per year for the first time in FY 2029.  It will of course continue to increase every year after that.  This $1 trillion per year will surely shock some people.  As a point of reference, the net interest paid in FY 2022 was $534 billion.  So this number will double in just 7 years.

Fourth, the net interest paid will exceed the primary deficit.  This may happen earlier in FY 2027.

Fifth, the Debt/GDP ratio will increase at least 2% every year.  (This also may happen earlier).

So what does this mean?  The interest of $1 trillion+ per year will increase the debt, along with the primary deficit.  (We have a huge debt and we aren't even paying the interest on it).  It means that voting will be useless because no matter who is in power, they will be almost helpless to change the situation.  It means that the debt percent to GDP will continue to rise rapidly.  (It is rising now, but it will rise even faster as a percent of GDP).

What do I think will happen?  I think it should be obvious to everyone that the national debt will never be paid off or even partially paid.  We will never have a surplus in a year again.  (The last year with a surplus was 2001).  The biggest thing is I think there will be a digital currency introduced, and the Fed will start quantitative easing by buying the debt with digital currency.  So the US will have 2 currencies and there will be an exchange rate to transfer between them.  (They won't have the same value, or at least there will be fees to transfer between them).  This will have the effect of monetizing the debt, which will cause even more inflation.

It is possible this date could be delayed.  If GDP grows more than expected, or if the deficit is less than expected, then maybe there is more time.  I also think the Fed should cut interest rates now even if inflation is high, because this will lower the amount of interest that needs to be paid.  And the Fed may actually be causing inflation by raising rates, as I have mentioned before.

The point of no return doesn't mean the system will immediately collapse.  Indeed there may be another 20 or 30 years before this happens.  It just means that it is inevitable.  I think there is still a tiny bit of hope now to change things, but by the date above, this will be impossible.

Bonus Question:  What will the Debt to the Public be on October 1, 2028?  I project it to be $34.6 trillion.  What is it currently?  $24.6 trillion.  Is there any way to avoid going another $10 trillion in debt in the next 5.5 years?  I don't think so, and that is why I am being alarmist.  If we could spend only, say $8 trillion by that date, maybe we could push it out a little.