Morgan Housel

You know, Ford Motor has been in debt for 100 some odd years, and it'll be in debt 100 years from now if it's still around.

It's a perpetual company.

And so the way that we did it after World War II and the way that we could do it now, whether we will or not, I'm not saying we will, but the way you could do it now, I don't wanna get too technical here, but if the deficit as a percentage of GDP is smaller than the growth rate of the economy, then debt to GDP goes down.

The amount of debt you have goes up every year, but debt to GDP goes down.

So for example, if the economy were growing by 5% per year,

the government could run a deficit of 4% per year and debt to GDP would go down.

So when people talk about paying off the debt and balancing the budget, you don't have to, and we probably never will.

And you can still come to a scenario where it gets much more manageable.

Now, it could also be catastrophe.

And you mentioned there's numerous examples of that.

So that's always the case.

But all of this is like, what are the odds?

Catastrophe is a chance.

Is it the highest?

Is it the most likely outcome?

I don't think so.

I think the most likely outcome is muddle through.

And what muddle through means are periods of very high interest rates and very high inflation that people are sick of and tired of and hurts a lot of people.

And the truth is, I was understating it.

It's actually like 99.6% or something like that, that it could decline.