VAN HOISINGTON: Once The US Hits The Debt 'Bang Point' We're Screwed

"The real worry is that the mounting debt could lead to the "bang point":

There is a longer-term negative feedback loop that has been referred to as the “bang point” by economists Reinhart and Rogoff, and it occurs when government or private borrowers are denied access to further credit because the marketplace has no confidence that new or existing debt can be repaid. At this point interest rates soar and debt issuance becomes impractical; therefore, the government or private borrower is forced to live on current revenues. As recent cases in Europe have documented, this is painfully disruptive, with high social costs..."

at http://www.businessinsider.com/van-hoisington-debt-bang-point-2012-4#ixzz1sKidFZRH