Fortunately, there is a powerful solution to this lift America out of this quagmire…
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Central Banks Cannot Fix The Sovereign Debt Bubble
ZeroHedge, Oct 01, 2026 – Authored by Daniel Lacalle via dlacalle.com,
Excerpts:
Public debt is like a massive iceberg. The bonds that have already been issued are the visible part of the iceberg. However, the 94% global public debt to GDP only tells a small part of the story. Below the surface are unfinanced commitments to pensions, healthcare, and other spending that have no adequate funding and add up to 300% of GDP. Looking only at outstanding debt provides us an incomplete picture of what taxpayers may eventually have to finance. Even worse, it gives a wrong view of government solvency.
The IMF projects global public debt will reach 100% of GDP by 2029, with the increase driven by major economies. Thus, this problem extends well beyond the emerging markets usually associated with debt crises.
The United States provides a clear example. Treasury’s fiscal 2025 financial report puts federal debt held by the public at 99% of GDP and separately reports approximately $88.4 trillion in projected social insurance funding shortfalls, measured in present-value terms over 75 years.
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Central banks can make borrowing easier and help governments disguise the problem for a while. Lower interest costs can provide some relief. However, governments use that relief to increase spending instead of repairing their finances. Thus, the underlying problem keeps growing.
Quantitative easing may calm markets and reduce risk premiums for a while. However, central banks do not print solvency, and bond purchases do not make permanent overspending sustainable.
Furthermore, QE does not make the public sector’s obligations disappear. When a central bank buys long-term government bonds using interest-bearing bank reserves, it effectively replaces longer-term borrowing with liabilities whose cost moves with overnight interest rates, according to the Bank For International Settlements. Viewed together, the government and central bank become more exposed to increases in short-term rates, not less. Once we understand this situation, we also see why inflation is rising. Central banks and governments are eroding the purchasing power of the currency by issuing too much money-debt compared to the private sector demand. Additionally, higher taxes constantly weaken the private sector. All this combined leads to stagnation and persistent inflation.
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Financial repression is also shifting the burden while impoverishing citizens. Governments can steer savings towards public debt, but they keep returns below inflation, reducing the real value of what they owe.
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Ignoring the problem and delaying spending cuts also makes the adjustment harder. Treasury estimates that delaying fiscal reform until 2036 would increase the average adjustment needed from 4.7% to 5.6% of GDP. Waiting for the next central-bank intervention is therefore a comfortable but costly political choice.
The solution comes from cutting spending and reforming committed programs before a crisis forces abrupt changes. Stronger productivity, private investment, and competition must also be part of the answer. Governments cannot keep weakening the productive economy with ever-increasing taxes while expecting it to finance ever-larger promises.
Central banks cannot fix the sovereign debt bubble. The short-term placebo effect fades away faster every time, regardless of the size of the purchase plan. QE and financial repression did not buy time, because governments did nothing and left the underlying problem unresolved. Citizens are paying for the same irresponsibility through inflation, weaker growth, lower real net wages, and higher taxes. The absence of a bond-market crisis today does not mean the problem has disappeared; it is just eroding the productive economy through crowding out and financial repression.
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The Leviticus 25 Plan will resolve the underlying problem – out of control government spending, including: 1) Massive reductions in the number of citizens needing entitlement and social welfare program benefits to meet their daily living expenses; 2) Major reduction in the number of people needing / qualifying for income security programs; 3) Major reduction in federal and state government social welfare administrative expenses.
The Leviticus 25 Plan will deliver: 1) $37.303 billion federal budget surpluses (2027-2031); 2) Strong and sustainable economic growth; 3) Higher ‘real net wages’ for America’s work force; 4) Lower taxes; 5) U.S. Dollar stabilized purchasing power; 6) A strong and sustainable foundation for the U.S. credit market; 7) Citizen-centered health care.
The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens. It is a comprehensive plan with long-term economic and social benefits for citizens and government.
The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.
The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens. It is a comprehensive plan with long-term economic and social benefits for citizens and government.
The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.
The Leviticus 25 Plan – An Economic Acceleration Plan for America
$95,000 per U.S. citizen – Leviticus 25 Plan 2027 (73744 downloads )