Musical chairs in the government tax queue

What is the economy doing?

Waiting for DC to deliver the 100 million taxpayers who will flatten the upcoming debt bulge.  That is a very large, unique set of school girls and should be piling into the tax queue. But they mill about, in the middle of a bizarre election season.

Who believes?

Does anyone really think DC can get their arms around that debt bulge?  Remember our window, the ten year yield on Treasury bonds.  It is bound on the bottom by the insurance cost of foreign lenders.  It is bound above because Congress does not have the liquidity for rollover spikes in interest payments.  The bounds are about 1.5 to 2.0.  That is a narrow window and it is closing.

We are entirely dependent on foreign lenders.
The Fed cannot QE again without raising the currency exchange risk, and that raises insurance cost for foreign lenders.  Congress will face the come to Jesus moment and likely go through a bunch of shutdowns.  A huge mess, maybe 1% growth for a long time, or a recession that forces the issue.