But strike a deal they will. With monthly deficits running around $100 billion, the United States can’t cut spending or increase tax revenues enough to avoid further borrowing this year.Donald Marron at the Tax Policy Center
We could measure this and define sovereign default risk with it. Central government does not have the channel capacity to keep going. Local government does and the total government channel is not maximum entropy. Tax flows approach maximum entropy much faster, so during a recession we need debt to carry a sluggish government through the downturn.
Why have the channel requirements for government flows changed? Government is still attempting a channel precision that is unsupported by the current economy. Over the past 30 years we have had enough debt to cover the channel incoherence, but no more. It is time for central government to restructure or default.
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