The US. debt is not going away even with a Strategic Bitcoin Reserve over the next 10 decades

People think that the government is just going to whip out $36.5 trillion and clear its debt because the current administration makes “promises”. For a nation built on Capitalism where debt financing is the primary means of funding business developments, it's comical that anyone would believe in the idea of “paying off debts” without acquiring new ones.

The next 10 decades is a century, which is 100 years and most of us here today won't be around, but what's sure to remain is the US debt, which at this point, will probably be higher than today's $36.5 trillion.

Before I dive into specifics, the reason for this article is a report I've had on my read later list for a while now that involves the United States and its Strategic Bitcoin Reserve(SBR).

This is a report involving Michael Saylor, a known Bitcoin bull who has been buying up billions in BTC with debts acquired through his company, Microstrategy(now just called “Strategy”).

Presented at the whitehouse crypto summit on March 7, the document, titled “A Digital Assets Strategy to Dominate the 21st Century Global Economy” proposes that the United States government acquires up to 25% of Bitcoin's supply before 2035 when most of the supply will be mined.

Saylor claims that this act will aid the United States offset its debt as it would lead to a potential $16—81 trillion in wealth generation for the nation.

It's also important to note that Saylor suggests that the US never sells its Bitcoin, claiming that by 2045 the reserve should be generating $10+ trillion annually.

So much “speculations” and very little actual examples of “hows.”

I mean, I totally understand that expecting the value of the Bitcoin reserve to grow to $16-81 trillion means you expect Bitcoin's price to reach $3.1 million to $15.5 million per BTC.

However, outrightly saying that a reserve worth at peak, based on your speculation, $81 trillion, will generate $10 trillion annually without specifying how is just crazy talk.

That's a 12.35% APR by the way, and that's supposed to be a stable return?

This would demand that Bitcoin outperforms the economic value generated within the United States since the nation's $29.88 trillion economy, in terms of velocity of money, can only yield $5 trillion in revenue from taxes, representing a 16.75% yield despite the size of industry.

It's just impractical with the SBR

The idea that Bitcoin is digital gold is only fun when we're simply trying to paint a picture of its value proposition.

Bitcoin isn't as or like gold. Gold is a commodity, Bitcoin is a currency, it's money, even though it appreciates like retards trade it(which is true) and is built on a system that makes it fail to perform well as money without giving up to centralization.

If any government heavily gets involved with crypto, it's a signal that the currency is essentially stronger than its own native fiat currency. It's not that hard to figure what such a message would mean for the United States.

That said, if we judge by the fact that the SBR will not be selling its Bitcoin, it raises the question of how then would it generate revenue?

Will it become a collateral? If that's the case, it would only lead to more debt being issued. Besides, the same results can be achieved through expanding on stablecoins without the government having an exposure to Bitcoin.

The Department Of Government Efficiency, DOGE has currently saved $115 billion in government spending. The problem however is that it can't save nearly enough to make the United States debt-free.

The United States would have to stop issuing more debt and have a budget surplus of $1.37 trillion annually to be able to pay off its debts. This value includes interest payments which is estimated to be on its way about $1 trillion.

Considering, and judging by actions taken by the Trump administration, it's hard to imagine that Trump will leave the office with things in any good place beyond maybe lower interests rates on bonds?

If Trump reduces tax burdens(as he seems to be doing), government revenue drops, and it has to sell bonds. The United States peak budget surplus, historically, is below $300 billion, it's rather too far from generating enough revenue whilst keeping taxes low and also investing in Bitcoin without shorting the dollar in the process.

Every process that the Bitcoin community demands of the US government is bad news for the USD.

There's no way both wins, so the big question would be if the US would be happy to migrate to a Bitcoin standard and lose the flexibility of creating debt?

We can expect some growth in GDP through government leniency that could cause debt-to-GDP to drop slightly, but eliminating the debt completely is just not feasible, even in 100 years.

Especially if we consider that changes in administration will also influence what direction things take. What the United States government will do at the end of the day will be to maintain slowly growing debt, pay interests and use inflation to reduce the real value of debt. That is, they will always manipulate the market to keep interest payments low.

The economy will expand into several 100 trillions but it will remain debt-backed, not revenue. The US owning 25% of Bitcoin's supply will not offset the value of its debt by much because it would have acquired more by the time the holding is worth what's being speculated and it would be gaining exposure to an asset it cannot easily utilize.

Even if $36.5 trillion magically appeared in the white house, the government would not move to clear the debt. What Elon Musk is doing with DOGE isn't about clearing US debt, it's about recalling money from wasteful(fraud) sources by the previous administration, so it can be invested into something else(with potential frauds too). One does not need to spell out what those things might be.

Posted Using INLEO