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

Feds Run Second-Biggest Budget Deficit in History; Spending Up from 2020 Record

The federal budget deficit for fiscal 2021 came in at $2.77 trillion. It was the second-largest deficit in US history, just behind last year’s $3.13 trillion shortfall. Despite falling shy of the deficit record, Uncle Sam spent even more money in 2021 than it did during the depths of the 2020 coronavirus recession.

READ MORE →

Stagflation Warning: Atlanta Fed GDP Estimate at 0.5%

As governments shut down the economy in response to COVID-19 and the Federal Reserve put money printing into hyperdrive, we warned that it was a recipe for stagflation. Today, it looks like stagnation is here. Stagflation is an economic environment with rapidly rising prices, a weak labor market, and low GDP growth. It’s looking more […]

READ MORE →

Chinese Gold Demand Continues to Strengthen

Gold demand in China was up in September, as the country approaches a peak gold-buying season. Both gold withdrawals from the Shanghai Gold Exchange (SGE) in September and gold imports in August were up, a sign that the Chinese gold market continues to recover after it was hit hard by the coronavirus pandemic.

READ MORE →

JP Morgan Chase CEO Worried About Higher Than Expected Inflation

With CPI data once again coming in hotter than expected, it’s getting harder and harder for the mainstream to swallow the “transitory inflation” narrative. And some people are starting to worry. During an earnings call, JPMorgan Chase CEO Jamie Dimon expressed concerns about higher than expected and persistent inflation ahead.

READ MORE →

American Consumers Continue to Run up Credit Card Debt

Consumer borrowing has slowed somewhat from the record level we saw in June, but Americans continue to pile on the debt. Consumer debt grew by $14.4 billion in August to $4.35 trillion, according to the latest data from the Federal Reserve. That represents a 4% increase. This follows on the heels of a 4.8% increase in […]

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