By Eric Peters, CIO of One River Asset Management

“This package demonstrates that we can govern without surrendering to big spending or letting Democrats dictate priorities,” wrote the House Freedom Caucus in some talking points released to the media.

“We successfully stiff-armed a massive omnibus spending bill; locked in disciplined, flat spending levels; preserved President Trump’s policy priorities… and kept our leverage for the next round in January.”

People can say whatever they want, but I’m pretty sure our politicians closed the US government for a record 42 days and changed absolutely nothing. That’s quite an accomplishment. Sublime ineptitude. Congressional approval ratings supposedly declined 11pts to 15% during the period. Remarkable.

If a trader knew that 85% of his decisions were losers, he’d become the richest man on earth by simply doing the exact opposite of his instinct. I’m guessing Pelosi made good money trading the chop, but the broad equity market ended the shutdown period roughly a percent higher than where it started.

Extrapolating the recent pace of deficit spending, the Federal government accumulated another $600bln of debt during the shutdown, adding more leverage to the system, sustaining the economy, supporting asset values.

But even so, 10yr treasury yields are unchanged from where they were before the shutdown.

Crypto prices got smoked, with bitcoin down roughly 16% for no particularly good reason, even as gold rose 5%.

Liquidity trades often need momentum to sustain them, and the hot money has been chasing AI and gold.

Beijing added roughly 62 gigawatts of electrical generation capacity to China’s grid while Washington remained closed. That’s roughly the generation capacity of the entire UK, once the world’s greatest power.

80% of China’s new generation capacity is renewables, which means that once its built, it requires no coal, gas, or oil imports to power data centers. That’s quite a competitive advantage in this existential race toward AGI.

But at least we have our democracy, which we’ve been told is the worst system except for all the others.

By Meris Lutz of UtilityDive

Summary

The U.S. installed nearly 26 GW of new generation capacity between January and August 2025, up slightly from the approximately 23 GW installed over the same period last year, according to the most recent monthly infrastructure report from the Federal Energy Regulatory Commission.

As it has for most of the past two years, solar continued to dominate new generation resources, accounting for 2.7 GW out of 4 GW brought online in August alone, and 19 GW — about three-quarters — of generation capacity additions this year. 

The report also says FERC reissued a certificate for Williams Companies to construct and operate its Northeast Supply Enhancement Project. That expansion of the Transco gas pipeline from New Jersey to New York was revived following talks between President Donald Trump and Gov. Kathy Hochul in May after the Trump administration briefly froze the Empire Wind project. The White House and the developer of the wind project have told journalists the two sides reached a gas-for-wind deal, while Hochul has denied striking such a bargain.

Solar dominated capacity additions, according to FERC’s monthly report, while a controversial gas pipeline project from New Jersey to New York got a green light.

The report shows momentum for renewables continuing, despite the federal government’s emphasis on fossil fuels and nuclear. FERC lists 136 GW of “high probability additions” through August 2028, with renewables, led by solar and followed by wind, accounting for nearly 84%. Natural gas accounts for about 15% of high probability additions.

“Notwithstanding impediments created by the Trump Administration and the Republican-controlled Congress, solar and wind continue to add more generating capacity than fossil fuels and nuclear power,” the Sun Day Campaign’s executive director Ken Bossong said in a statement. “And FERC foresees renewable energy’s role expanding in the next three years while the shares provided by coal, oil, natural gas, and nuclear all contract.”

Large renewable projects that began operating in August include Hecate Energy’s 517-MW Outpost solar and storage project in Webb County, Texas; Gibson Solar’s 280-MW project in Gibson County, Indiana; and expansions at the Roadrunner Crossing Wind Farm in Eastland County, Texas, totaling 254 MW. 

While solar and wind made up most of the new generation added in August, a number of smaller gas generators also came online that month, totaling 888 MW. They include: Southern Indiana Gas & Electric Co’s 248-MW A.B. Brown expansion project in Posey County, Indiana; Basin Electric Power Coop’s 245-MW Pioneer Generation Station expansion in Williams County, North Dakota; and Lower Colorado River Authority’s 188-MW Maxwell Peaker Plant in Caldwell County, Texas.

Federal officers from Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection (CBP) carried out large-scale raids across Charlotte on Saturday as part of President Trump’s push to deport criminal illegal aliens. 

Charlotte Mayor Vi Lyles, Mecklenburg County Board Chair Mark Jerrell, and Charlotte-Mecklenburg school board member Stephanie Sneed wrote in a statement that they will “protect the rights of all people who call Charlotte and Mecklenburg County home.” 

What they really mean is to protect illegal aliens at all costs. Why? Because illegals are politically valuable, both as a future voting bloc and as a demographic booster for the next Census, which directly benefits the Democratic Party, now taken over by far-left DSA-ers. 

JUST IN: Charlotte Mayor, Chair of the Board of Commissioners, and Education Board member issue a statement vowing to protect illegals amid ICE operations.

They also confirm that local police WILL NOT cooperate with ICE.

They’re prioritizing foreign criminals over American… pic.twitter.com/QpQDRKrUl6

— Libs of TikTok (@libsoftiktok) November 16, 2025

“Americans should be able to live without fear of violent criminal illegal aliens hurting them, their families, or their neighbors,” Assistant Homeland Security Secretary Tricia McLaughlin said in a press statement on Saturday.

“We are surging DHS law enforcement to Charlotte to ensure Americans are safe and public safety threats are removed.”

Oh yeah baby! It’s about to get real in Charlotte, NC. All you illegal aliens in Charlotte better get on that CBP Home app and start self-deporting. pic.twitter.com/2HZ0j8FjGG

— Kim “Katie” USA (@KimKatieUSA) November 15, 2025

City and county officials have criticized the enhanced federal immigration enforcement operations.

“The expected … operations are causing unnecessary fear and uncertainty in our community as recent operations in other cities have resulted in people without criminal records being detained and violent protests being the result of unwarranted actions,” read a Saturday statement prepared by Charlotte Mayor Vi Lyles, Mecklenburg Board of County Commissioners Chair Mark Jerrell, and Charlotte-Mecklenberg Education Board Chair Stephanie Sneed.

Lyles, Jerrell, and Sneed went on to state that the Charlotte-Mecklenburg Police Department doesn’t assist with federal immigration enforcement operations.

Lastly, the city and county officials called on those considering protesting to remain peaceful.

“We do not want to see violence like many witnessed in other cities. We can stand up for what we believe in without resorting to violence,” the statement reads.

Let’s not forget unhinged Mayor Vi Lyles faced backlash after calling for “compassion” toward the violent madman accused of slaughtering Ukrainian refugee Iryna Zarutska on the city’s light rail.

Deadly stabbing on NC train Aug. 22, 2025 (WCNC:Charlotte Area Transit System per CNN Newsource)

Meanwhile…

North Carolina: ICE has arrived to save another city from foreign criminals.
Juan Arias, who was a Colombian-born ILLEGAL IMMIGRANT and came to America as a child. He later qualified for DACA IN 2011 under Obama he is now the 1st Homosexual CITY COUNCILMAN in Charlotte, NC.… pic.twitter.com/N110k8KgHT

— hernando arce (@hernandoarce) November 15, 2025

Fun facts about the area: Approximately 58,000 illegals are living in Mecklenburg County, and an estimated 325,000 in North Carolina (data found here). 

X user Cynical Publius has three suggestions for the White House that would end the nation-killing rule Democrats and their globalist allies have imposed, a sinister rule marked not only by an open-border invasion of tens of millions of illegals designed to disenfranchise native-born voters, but also by an invisible insurrection carried out through color-revolution-style operations against Trump and ‘America First’ via a dark web of nonprofits… 

The Democrat Party as we know it today would cease to exist if the following three measures were implemented:

Nationwide voter ID with in-person, same-day voting except for true absentee situations.

End tax exempt status for ALL 501(c)(X)s (even religious, because if we leave that they will abuse it).

Continue Trump’s enforcement of existing immigration laws until we have rolled back all damage done over the last ten years.

The Democrat Party as we know it today would cease to exist if the following three measures were implemented:

1. Nation-wide voter ID with in-person, same-day voting except for true absentee situations.

2. End tax exempt status for ALL 501(c)(X)s (even religious, because if… pic.twitter.com/tnxyETJh5t

— Cynical Publius (@CynicalPublius) November 9, 2025

Related:

Chicago Mayor Asks The UN To Intervene In Trump’s Deportation Efforts

The illegal-alien invasion facilitated by Democrats and their globalist allies shows no respect for borders or the rule of law. And without the rule of law, there is no country. All indications now point to a rise in deportations.

By Benedict Vigers of Gallup,

For the second straight year, about one in five Americans say they would like to leave the U.S. and move permanently to another country if they could. This heightened desire to migrate is driven primarily by younger women.

In 2025, 40% of women aged 15 to 44 say they would move abroad permanently if they had the opportunity. The current figure is four times higher than the 10% who shared this desire in 2014, when it was generally in line with other age and gender groups.

The percentage of younger women wanting to move to another country first rose decisively in 2016, the final year of President Barack Obama’s second term. That year, Gallup surveyed the U.S. in June and July, after both parties’ presumptive nominees were set for the November election, which Donald Trump went on to win. Desire to migrate continued to climb afterward, hitting 44% in President Joe Biden’s last year in office and remaining near that level in 2025. This suggests a broader shift in opinion among younger women, rather than a solely partisan one.

The sharp rise in younger women wanting to leave the U.S. has created a large gender gap between them and their male counterparts. Today’s 21-percentage-point gap between younger men (19%) and women (40%) wanting to leave the U.S. is the widest Gallup has recorded on this trend.

Since Gallup began measuring this question globally in 2007, few countries have shown gender gaps this wide in the desire to migrate. Before the U.S. in 2025, no country had recorded a gap of 20 points or more between younger men and women.

Gallup’s question asks about desire to migrate, so these findings reflect aspirations rather than intentions. Previous Gallup research shows not everyone who wants to move will move. Still, the data indicate that millions of younger American women are increasingly imagining their futures elsewhere.

While the desire to move for good is currently elevated among U.S. men as well as women under age 45, it remains relatively flat at low levels among their counterparts aged 45 and older.

What has not changed is where these younger women would like to go. Canada remains the top preferred destination for younger American women looking to leave, with 11% of those in the years since 2022 mentioning Canada as their top destination, ahead of New Zealand, Italy and Japan (all 5%).

Young Women in Other Advanced Economies Don’t Share the Desire to Move

The growing trend in younger women in the U.S. looking to leave their country is not evident in other advanced economies. Across 38 member countries of the Organisation for Economic Co-operation and Development (OECD), the percentage of younger women who say they would like to migrate has held relatively steady for years, typically averaging between 20% and 30%.

For much of the late 2000s and early 2010s, younger U.S. women were less likely than their peers abroad to want to move. That changed around 2016. Since then, they have been more likely than younger women in other wealthy countries to say they would leave their homeland for good. By contrast, U.S. men aged 15 to 44 continue to be less likely than average to want to migrate compared with their peers in the OECD.

Politics Plays a Role Alongside Age and Gender

Rising interest in leaving the U.S. is shaped not only by age and gender but also by political attitudes. In 2025, there is a 25-point gap in the desire to migrate between Americans who approve and those who disapprove of the country’s leadership.

Desire to permanently leave the U.S. was not always such a politicized issue. Between 2008 and 2016, migration aspirations were similar regardless of views toward the country’s leadership. After Trump’s election, 2017 marked the first time this gap exceeded 10 points. During Trump’s first term, the difference in migration aspirations between those approving and disapproving of national leadership averaged 14 points. Under Biden, the gap narrowed to eight points, before climbing to 25 points in 2025, the first year of Trump’s second term in office.

Younger women’s much stronger orientation to the Democratic Party than other age and gender groups exhibit helps explain some of the differences in desire to move abroad. So far in 2025, 59% of women aged 18 to 44 identify as or lean Democratic, compared with 39% of younger men, 53% of older women and 37% of older men.

Desire to Migrate Rises Among Single and Married Women Alike

The people most likely to express a desire to migrate are typically those who have greater mobility, such as the unmarried, those without children at home and younger adults. However, among American women aged 18 to 44, the desire to migrate has risen regardless of marital status.

Between 2024 and 2025, at least two in five younger women — 41% of those who are married and 45% of those who are single — said they would like to move abroad permanently if given the chance. This is the narrowest gap by marital status among younger women in desire to move that Gallup has recorded since first asking the question, suggesting that younger married women increasingly do not view marriage as a barrier to migration.

The same pattern is true for having young children at home. Among younger women with children living at home, 40% say they would like to leave the U.S. for good, on par with the percentage among those without children (44%). Were these women to follow through on their desire to migrate, it is likely that they would take the next generation with them.

Younger Women Lose Faith in America’s Institutions

Across demographic groups, Americans with lower confidence in institutions such as the government, judicial system, military and integrity of elections are consistently more likely to express a desire to leave the country.

Over the past decade, younger women have not only shown the largest increase in wanting to move abroad but also have experienced the steepest drop in institutional confidence of any age or gender group.

In 2015, women aged 15 to 44 scored an average of 57 on Gallup’s National Institutions Index, which measures confidence in the national government, military, judiciary and honesty of elections.

Since then, younger women’s scores have fallen by 17 points — a sharper decline than seen for any other demographic — and dropped during both the Trump and Biden administrations. By comparison, women aged 45 and older and men aged 15 to 44 have remained broadly stable in their confidence in institutions, while the score among men aged 45 and older has increased by 15 points.

The Supreme Court’s 2022 Dobbs v. Jackson Women’s Health Organization decision, which overturned the constitutional right to abortion, may have contributed to the drop in younger women’s National Institutions Index score — particularly the steep decline in their confidence in the judicial system, which fell from 55% in 2015 to 32% in 2025, more than any other age group. However, when it comes to desire to migrate, the Dobbs decision alone may have played a more limited role, given that the trend in wanting to leave began years before the ruling.

Bottom Line

More Americans than at any time in the past two decades say they would like to move away from the U.S. permanently, with the sentiment becoming increasingly politicized since 2017. Younger American women’s desire to leave the U.S. has surged to unprecedented levels in recent years, widening the gender divide to more than 20 points, the widest recorded for any country in the World Poll.

Unlike their peers in other advanced economies, younger American women now stand apart from the rest of the U.S. in several respects. They increasingly lack faith in national institutions and picture their futures beyond America’s borders.

Submitted by Peter Tchir of Academy Securities

pAIn Ahead?

Last weekend we published pAIn Ahead? which had two major problems:

It is a bad idea to start a title with a small letter, as our publishing system is designed to force Capital Letters in titles, including the first word of the report.

It is more than a little embarrassing to have a title “pAIn Ahead” out there as stocks opened strong and went higher throughout the next few days with the Nasdaq 100 closing up 790 points!

But, on the week, the index fell slightly, making last weekend’s report far less misplaced than where it started the week. If we hadn’t had a major “buy the dip” moment on Friday at its lows, the Nasdaq could have closed down 2% on the week.

Since we had a small loss on the week, a 4.4% pullback from its high on Monday to its low on Friday, it makes sense to revisit the points we made when expressing concern about the potential for an AI- driven pullback.

Bitcoin. Whether it is leading the market or just going along with the “momentum” stocks, crypto had a tough week, with Bitcoin dropping from $104k last Friday to $94k this Friday. It is rebounding a bit this weekend, and is worth watching as virtually every regulatory and administration headline remains positive, but it cannot seem to rally significantly. I think it is safe to say that everyone keeps an eye on Bitcoin as a barometer for risk assets, especially on weekends, when markets are closed, but the news flow doesn’t stop.

Retail Dip Buying. I remain suspicious that the longs are held by “pros” at this stage as I’ve seen evidence of profit taking by retail. Having said that, the “retail” favorite names and ETFs had a very volatile week (even more so than the market as a whole) and we did see some inflows into some of the most “beat up” names. Maybe it was retail that led the surge, but it could have also been pro traders getting “cute” and trying to anticipate positive weekend news (the admin has been quick to provide positive headlines, especially over the weekend and on Monday morning, when stocks stumble). We will see what happens, but I think the almost 1% late-day fade off of the highs is telling. Of late, dip buying isn’t always providing instant gratification.

Volatility. VIX inched higher on the week, while realized stock market volatility rose rather aggressively. The MOVE Index (a measure of bond market volatility) rose more rapidly than the VIX. Higher overall volatility can force some “risk parity” strategies to de-risk. Any shift in correlations between major asset classes can cause them to reduce as well. This could be happening already, but I doubt it has been meaningful. Another week like the past week (especially if the net result is more to the downside) could cause real de-risking.

Sentiment and Inflation. The admin is dialing back tariffs on many agricultural goods. Coffee is high on my list. I’m having difficulty wrapping my head around the fact that the admin is signaling that they are championing lower prices by eliminating these tariffs.

Hmmmm…this admin put the tariffs in place, so not sure how much credit they deserve for removing them. I think it is good that they are changing policy, but it always seemed weird to tariff things that we don’t grow or produce domestically (and have climate limitations to doing so).

Hmmmm…is this a low-key acknowledgement that on some goods, where there is no obvious replacement, tariffs get paid for by the consumer? This has been pretty clear since day 1, so it is good that it is being acknowledged, if only tacitly, but how many other tariffs are finding their way to the consumer? We suspect that number is still small, but growing over time.

There is a lot of rhetoric about affordability, and that is only increasing as both sides dig in to fight over costs and who is responsible.

Bonds and the Fed. The probability of a Fed cut has moved from over 60% to “only” 43% according to Bloomberg’s WIRP function. Now that the probability has dropped below 50% the Fed may lean towards not cutting, since the market isn’t “forcing” their hand. Yes, the Fed will make its own deliberations, but it does pay attention to the market. A lot could still happen between now and the December 10th meeting, but this is yet another indicator of dialing back cuts until the new year. I’m told much of the recent selling was triggered by the concern that the Fed could be less aggressive. I could see that being a part of the whole discussion, but we are susceptible in so many ways that it didn’t take much to shake our belief in the biggest momentum trades of the year. The “old” 10- year (August 2035 maturity) rose from 4.10% to close out the week at 4.14%, though it briefly got to 4.05% on Friday morning (around the timing of OPEX). I continue to expect more downside for Treasuries with the 10-year yield to approach 4.3%. That will weigh on stocks if it turns out to be correct.

Rotation

There is certainly a rotation trade and I think it will continue to work.

For this trade, I like the S&P 500 equal weight versus the Nasdaq 100. In the past year, QQQ (a Nasdaq 100 ETF), is up about 20% while RSP (a S&P 500 equal weight ETF) is up only 4.5%. There is room for significant outperformance on this relative value trade.

Bottom Line

Sticking to our ProSec (Production for Security) themes. See any of our recent reports at Academy Macro. Look for the “rotation” to continue.

Also, I think the pain continues. The Nasdaq 100 is down on the month and the issues facing it (discussed above and detailed last weekend), have not been resolved. If anything, the big move on Monday and then the fierce dip buying on Friday may well have left a lot of short-term “trading” longs exposed to a further pullback.

I don’t like Treasuries (targeting at least 4.25% on 10s).

We continue to think credit spreads will remain under a bit of pressure. Nothing major, but the combination of:

Some private credit “fiascos” (not sure what else you can call something that seemed to go from par to default almost overnight). Again, I don’t think there are a lot of “cockroaches” out there, but it is weighing on the market – and I believe this is making it more difficult for small companies to access credit – which is a real-world problem.

Increasing “concern” about how much debt needs to be raised to build out data centers, AI, and the electricity generation capacity to power those data centers. Not alarming and will play out over time, but this will weigh on credit spreads.

The low income consumer. Increasing concerns about delinquencies and the fact that the number of households having delinquencies may be set to rise.

It was a very memorable Veterans Day week here at Academy, and now we set our sights on Thanksgiving with friends and family! In the meantime:

Rotation? Yes.

pAIn Ahead? Likely

Smooth Sailing? Unlikely

This is a “normal” or even “run of the mill” adjustment to valuations, current conditions, and various outlooks. Certainly not alarming, but not yet time to fully reload into the momentum names.

Multigenerational living has surged to a record high, with 17% of 2024 buyers purchasing homes designed for multiple generations, according to the National Association of Realtors. 

Families are increasingly combining households to cope with elevated living costs, caregiving demands, and even the need to reconnect as a family unit. This trend is being fueled by a housing market that remains frozen for many first-time buyers – caught between high mortgage rates and record high prices – pushing more families to pool resources and live under one roof.

The multigenerational home trend is being fueled by a “Silver Tsunami” of Baby Boomers entering their 70s and 80s. As this cohort ages, millions will downsize, retire, move into multigenerational homes, require caregiving, or transition to assisted-living or aging-in-place arrangements.

Evidence of this trend recently surfaced in a quiet northern Virginia neighborhood, where a newly built home addition has sparked outrage, according to FOX 5’s Bob Barnard.

Another view.

Barnard said a three-story addition to a single-story home is set to house three generations of one family. He noted that the builders met all zoning requirements, but the neighborhood is outraged because the addition resembles a small multifamily apartment building.

This is wild.

Immigrants move into a suburban Virginia neighborhood, construct a 3-story monstrosity of an “addition” for 3 generations of family members to live in—nearly encroaching on their neighbor’s property line.

And people wonder why Americans can’t afford homes… pic.twitter.com/L134Du4MXr

— johnny maga (@_johnnymaga) November 15, 2025

Given that the Silver Tsunami is underway and much of the real estate industry isn’t prepared, additions like the one seen in the northern Virginia neighborhood will continue to startle communities.

Authored by Joe Sullivan-Bissett via BondVigiliantes.com,

Government debt levels continue to linger in uncomfortable territory across developed markets, with fiscal deficits stubbornly high despite reasonably resilient growth and employment – especially when compared to past norms. This is not a post-crisis or post-war moment, yet debt levels resemble those of an economy fighting its way out of recession.

Runaway levels of debt, and the question of how they can be contained, could well be the defining macro story of the next decade. This not only has implications for public finances, but also the trajectory of yields, inflation, and the credibility of future policy.

High debt is not new, with history being full of examples of governments facing daunting fiscal positions, and each era has found its own way out: sometimes through discipline, sometimes through inflation, and sometimes through quiet financial engineering. Earlier this year, Rob Burrows explored options for dealing with debt in this blog.

Following on from that, below I explore if there are any useful lessons in history which could provide a solution for today’s backdrop.

Financial repression: The silent partner in debt reduction

After World War II, both the US and the UK emerged with debt-to-GDP ratios well above 100%, with the latter at 250%. Yet over the following decades, those burdens shrank dramatically, and without large fiscal surpluses or deep austerity. The solution was financial repression.

Governments and central banks effectively capped interest rates while letting inflation run high. With capital controls in place and a banking system that was required to hold government paper, real interest rates stayed negative for years. Investors earned less than inflation, and debt quietly melted away in real terms.

Source: Bank of England’s Eight centuries of global real interest rates, R-G, and the ‘suprasecular’ decline, 1311–2018

By the mid-1970s, the UK’s debt ratio fell to roughly 50% of GDP. Much of that adjustment came not from paying debt down, but from the erosion of its real value.

Could it work today? Not easily. Financial repression relies on closed capital systems and willing domestic savers, both of which are in short supply today. In open markets with moveable capital, measures such as yield caps or mandated sovereign debt holding would likely require complex regulatory interventions or indirect support from central banks. Such policies would be difficult in a globalised, market-oriented system.

Growth as the denominator: Britain after the Napoleonic Wars

After the Napoleonic Wars, Britain’s public debt exceeded 200% of GDP. Over the next half-century, it fell steadily, not through inflation (the gold standard ruled that out) but through real growth and persistent, if modest, budget surpluses.

The Industrial Revolution transformed output and tax revenues, while the state held spending flat. The result was a slow but powerful denominator effect: GDP grew faster than the debt stock, even as prices remained stable or fell.

Source: https://ourworldindata.org/

* Definition of ‘International $’ on which this data set is based, can be found here:https://ourworldindata.org/international-dollars

Could governments grow themselves out of debt again? That depends on whether today’s economy can find an equivalent productivity revolution. Demographics, slower innovation diffusion, and lower investment all weigh against it. Unless of course, AI proves to be the answer…

Inflation: The blunt instrument

Inflation has historically been one of the fastest ways to reduce debt. Weimar Germany in the 1920s and Japan in the immediate post-war years both saw real debts wiped away by surging prices. Even moderate inflation, sustained over time, can do significant work: in the 1970s, UK debt ratios fell sharply again as inflation outpaced borrowing costs.

Could governments inflate their way out today? Using inflation to reduce debt today is less straightforward, given that central banks are independent and focused on keeping inflation close to 2%. The recent post-pandemic inflation spike showed how higher inflation can create economic and social pressures, and how institutions respond to keep it in check. If inflation stays above target for too long, it could affect the credibility of monetary policy. Still, a period of slightly higher inflation alongside nominal growth might be seen as a practical path if political constraints make fiscal tightening difficult.

So are there any useful lessons from history?

Perhaps not. Each historical escape route looks less accessible today:

Lowering debt through austerity is politically challenging, especially in societies already weary from years of spending restraint and rising inequality

Inflation is broadly constrained through central bank objectives

Growth remains elusive, unless technology delivers a genuine productivity revolution

Financial repression, while possible in partial form, risks distorting markets and undermining investor confidence.

That leaves a muddle-through scenario: persistent deficits, modestly higher inflation tolerance, and debt ratios that stabilise rather than fall. Markets may increasingly price this as the new normal: A world of structurally higher term premia and periodic fiscal scares.

History suggests that when governments can’t grow, tax, or inflate their way out, they simply wait it out: relying on time, moderate nominal growth, and the slow erosion of debt through steady, incremental policy.

It’s not a dramatic ending to this episode, but it may be the most realistic one.