Friedberg argues politicians get elected by promising more benefits rather than cutting spending for fiscal sustainability.
“That's how people get elected in a democracy. They go to the voters, they say, here's what I'm going to give you.”
Friedberg states the US has $33 trillion national debt and a proposed $7 trillion budget next year.
“We are proposing the federal administration is proposing a $7,000,000,000,000 budget next year. We have $33,000,000,000,000 of national debt.”
Friedberg calculates refinancing half of U.S. debt at higher rates adds $300 billion in annual interest payments.
“And when that happens, you know, 2% increase in interest on $15,000,000,000,000 that's another $300,000,000,000 of interest payments a year.”
Friedberg estimates over half of Americans rely on government income directly or indirectly.
“So you're either employed by the federal, state, or local government or its agencies or one of its contractors or you're receiving one of the retirement checks from a government agency.”
Friedberg predicts federal bailout of state and local governments under Democratic control to avoid economic crisis.
“If you end up with a democrat controlled house and a democrat president in 2028, you'll very likely see a federalization of that obligation, meaning that the federal government will step in to bail out or support those state and local governments because otherwise there's gonna be a real kind of economic crisis afoot.”
Friedberg warns Social Security projected to run out of money within five to ten years.
“A bunch of programs are gonna run out of money, including social security, which is projected to run out of money sometime between, call it five and ten years from now.”
Friedberg states US has $40 trillion debt, $2 trillion deficit, with $1 trillion just in interest payments.
“We have $40,000,000,000,000 of debt and we're gonna have a $2,000,000,000,000 deficit this year. A trillion dollars of that is just interest on the existing debt. That number is getting bigger and bigger every year.”