The impending debt crisis in America has the potential to devastate the whole financial system

Everybody is making a concerted effort to act as though the American debt crisis is unimportant

"It does," Bill Bonner says.

Charles Maurice de Talleyrand-Prigord once remarked, "You have made a mistake, which is worse than a crime." Whatever the feds say it is, it is a crime. It's frequently not what you believe it should be. However, a mistake is distinct. Instead of turning right, you should have turned left. Forgetting your wife's birthday is the problem. You should have had a surplus in your budget, but instead you have a deficit.

There are two major mistakes in the Big, Bad, Budget Abomination, for instance. The most obvious is that they made the deficit bigger. Instead of cutting back, they decided to spend more on unnecessary programs. With £2 trillion in deficits, they are proceeding on such a massive scale that the entire US financial system is certain to collapse.

You can't spend more than you earn for very long, as we all know. However, some people convince themselves that we can "grow our way" out of the debt trap. As we've seen, the likelihood of such growth is decreasing due to federal policies. The aggressive deportation campaign of Donald Trump may cause over 500,000 Americans to leave the United States, according to Fortune. The US economy will probably grow less as a result of the labor force's decline.

Additionally, deficits will consume the capital supply. According to Seeking Alpha, "the less productive public sector absorbs more labor and resources as government spending increases, starving the more productive private sector of these critical inputs." Most people believe that even though the federal deficit was a mistake, the damage won't be felt for many years. Therefore, rather than us, the consequences will most likely affect our children and grandchildren. And since none of us can predict the future, why stress over something that might or might not come to pass tomorrow?

The Republican "spendfest" and debt deniers.

But the threat is getting closer, and the iceberg is dead ahead. For the second consecutive month, June saw an increase in inflation. We are unable to determine whether this is the start of significant price increases. However, just in case, it might be wise to monitor the lifeboats.

For solace, other debt-crisis deniers turn to Japan. They have not appeared to be bothered by the fact that their economy is contracting (along with their population), despite having the largest debt load in the world. Wait, though. The mistake is becoming increasingly obvious even there. Ten-year Japanese government bond yields have reached their highest level since October 2008, at 1.195 percent. Japanese people are capable of math. Even a slight rise in interest rates has a disastrous impact on government finances, which are 250 percent of GDP. To pay interest, the government must borrow money, which raises the cost of interest, expands the deficit, and increases the debt.

In the United States, the Republicans' "spendfest" continues, and mistakes continue to occur. They claim to spend too little money, but they are actually spending too much. "GOP lawmakers are warning that cutting spending on Medicaid and food assistance will cost the party seats in the midterms, threatening their razor-thin House majority by kicking millions of Americans off safety-net programs," The Hill reports. "After all, if huge deficits don't really matter, why try to save money on medical care for those who need it". Poor legislators had to make a choice. Which sin, which mistake, which error to make? They make them all, to be fair.

Visit bonnerprivateresearch.com to read more from Bill.