No Nixon Shock for us, asys Dalio

• Dalio says that the national debt, pension liabilities and health-care liabilities will ultimately have to result in higher taxes.
• The debt and social program “will either be paid by higher taxes or they’ll be not paid and defaulted on,” he said. “I don’t think they will be defaulted on.”
• The warnings about potential debt hazards come as the total federal debt outstanding has surged to $22.9 trillion, or about 103% of GDP.

Hmm. 

He may be right, but the alternative is Japan, and that I doubt.  So this is going to be an interesting test. The Constitutional hassle of a Nixon Shock in a debt based currency are difficult.  The Supremes are not too smart, and the legal approach may not pass political muster.

But deflation accelerates the demise of small states and the Senate shuts.  That is the other, legally impossible, solution.  Neither looks easy.