Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

National Debt Climbs Above $25 Trillion

  by    0   0

Twenty-eight days.

That’s how long it took to add another $1 trillion to the national debt.

On April 7, the debt pushed above $24 trillion. On Tuesday, May 5, it eclipsed $25 trillion.

It’s impossible to grasp just how big these numbers are. Consider that the debt is growing at an average of about $1.2 million per minute. Every day, Uncle Sam goes another $1.7 billion in hock.

According to the National Debt Clock, the debt to GDP ratio has risen to over 117%. Studies have shown that a debt to GDP ratio over 90% retards economic growth by about 30%.

And there is no sign that it’s going to slow down any time soon. Peter Schiff tweeted a poignant question.

The last trillion of debt was added in less than one month. How many more years do you think it will take for the National Debt to double to $50 trillion?”

Earlier this week, the US Treasury Department announced plans to borrow $2.99 trillion in the second quarter. The Treasury also plans to borrow another $677 billion in the July-September quarter, bringing the total fiscal 2020 budget deficit to a projected $4.48 trillion. Given those numbers, the national debt will end fiscal 2020 over $28 trillion.

President Trump said he plans to address the national debt if reelected. He didn’t present any kind of plan, but he did say that the growing debt “bothers” him.  It appears the plan is just to kick the can down the road by issuing longer-term Treasuries at zero percent interest.

“We’re putting in, we’re replacing debt with really long term good debt, zero, you know, which is a beautiful thing,” Trump said in a radio interview.

But who the heck is going to buy long-term bonds with no yield?

And refinancing doesn’t address the underlying issue. Uncle Sam has a spending problem. And he had a spending problem before the pandemic.

The federal government has run deficits over $1 trillion in four fiscal years, all during the Great Recession. The fifth trillion-dollar deficit was coming down the pike this year even before the massive stimulus spending in response to coronavirus. In effect, the federal government was already engaged in fiscal stimulus despite what Trump kept calling “the greatest economy in the history of America.” The deficit featured numbers you would expect to see during a massive economic slowdown — before the pandemic. Response to the coronavirus just put spending and debt in hyperdrive.

This isn’t the first time Trump has promised to address the national debt. He said he would take care of it when he was running for office.

“We’re not a rich country. We’re a debtor nation … We’ve got to get rid of the $19 trillion in debt,” Trump told The Washington Post. “I think I could do it fairly quickly. … I would say over a period of eight years.”

Two years later, the debt pushed above $22 trillion.

So, forgive me if I’m not confident about Trump’s willingness – or ability – to actually rein in spending and pay down the debt.

But make no mistake – we will pay for this – if not us, our kids and grandkids and generations to come.

Borrowed money has to be paid back. We are effectively taking future productivity and spending it now. There are only two ways to pay off government debt – higher taxes or inflation (devaluing your money).

Expect both.

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Ranks of the Long-Term Unemployed Growing

The mainstream spin on unemployment is that things are improving. The unemployment rate is coming down. The number of weekly jobless claims recently fell below 800,000 for the first time since government lockdowns in response to the pandemic went into high gear last March. But there are some troubling signs that undercut this good-news narrative. […]

READ MORE →

Rickards: Why Gold?

Why gold? In a recent article, Jim Rickards offers three reasons the biggest gains in gold prices are yet to come.

READ MORE →

Wave of Corporate Mergers Could Put More Americans Out of Work

Last week, we reported on the number of temporary layoffs that are turning into permanent job losses.  Now Goldman Sachs is projecting even more permanent job losses coming down the pike as a wave of mergers, acquisitions and corporate takeovers sweeps through the economy.

READ MORE →

Central Bank Digital Currencies: Another Front in the War on Cash

There has been a lot of talk lately about central banks implementing their own digital currencies. Why?

READ MORE →

Silver Investment Demand Nearly Triples Through First Three Quarters of 2020

Holdings of silver in silver-backed Exchange-Trade Products (ETPs) rose by 297 million ounces through the first three quarters of 2020, according to data released by the Silver Institute. That’s nearly triple the level of silver inflows seen during the same period in 2019. Meanwhile, investors also had a strong appetite for silver bullion coins and […]

READ MORE →

About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
View all posts by

Comments are closed.

Call Now