Soaring U.S. National Debt to Hurt the U.S. Dollar, Economy, and Consumers
The U.S. national debt is a problem no one seems to be talking about. It could take a severe toll on the economy and the U.S. dollar, and hurt the average Joe dearly.
The mainstream may make you believe that the national debt really doesn’t mean much and that it’s fine if a nation borrows money.
In the short term, increasing the national debt isn’t a problem at all. Governments need to invest or restart certain sectors of the economy and so on and so forth.
But if borrowing becomes a habit, then it is a problem. You cannot keep borrowing money and expect things to be good at the end.
The U.S. government has become a borrowing machine. It is reckless.
At the time of writing, U.S. national debt stood at $22.1 trillion. (Source: “The Debt to the Penny and Who Holds It,” Treasury Direct, last accessed February 27, 2019.)
Each month, we hear that the U.S. government is only adding to this debt.
How? It is spending a lot more than it receives in tax revenues. We are seeing massive deficits, and when the U.S. government can’t pay for its spending, it has to go out and borrow money. This is how the national debt continues to grow.
In fiscal-year 2019, which began in October 2018, the U.S. government has incurred a budget deficit of $318.9 billion. In the same period a year ago, this amount was $225.0 billion. In other words, the deficit grew by more than 41% year-over-year in the first three months! (Source: “Monthly Treasury Statement,” U.S. Department Of The Treasury, last accessed February 26, 2019.)
Keep in mind that the U.S. economy is generally in good condition and we are seeing deficits soar. What will happen in case there’s an outright recession?
There’s literally no one out there who is expecting that the national debt will decline any time soon. Even the most optimistic estimates call for a much higher national debt amount.
Don’t Forget the Interest Payments…
Dear reader, it wasn’t too long ago that U.S. national debt was below $10.0 trillion. In a matter of a decade, the debt amount has ballooned and more than doubled.
The U.S. national debt’s rate of growth is accelerating and only going to ramp up.
Don’t forget, the higher the debt, the bigger the servicing payments. In fiscal-year 2019, the U.S. government expects interest payments to be close to $600.0 billion!
I expect U.S. national debt to reach $30.0 trillion within a decade. Interest payments could be like throwing more gas on the fire.
Why Should You Worry?
Look at history. Whenever a nation has incurred massive debts, currency devaluation and economic collapse usually follow.
The U.S. government is hands down the most indebted government in the world.
The creditors continue to lend money, for now. But you have to wonder what happens when they start questioning its ability to pay. The day that happens, that will be the end of the U.S. dollar, and a massive economic collapse could become reality.