Over the last 90 days…
While political scandals, UFO disclosure hearings and Hollywood shenanigans held America spellbound…
The US government quietly racked up another $1.3 trillion in debt.
And now, the nation’s debt bill is within striking distance of $33 trillion.
That’s more than the value of the entire economies of China, Japan, Germany and the United Kingdom combined — which is truly unfortunate, because it means…
Every taxpayer in the United States is now on the hook for more than $256,000.
The Heritage Foundation warns, “This isn’t the plot of some dystopian novel. This is our future if we don’t demand that politicians in Washington control their spending addiction.”
Former Treasury Secretary Larry Summers agrees and says, “… we’re on a completely unsustainable path.”
And former US Congressman Ron Paul says, “That’s why anybody with a little bit of common sense and a little bit of economic knowledge and a little bit of instincts about this, they’d say ‘this can’t continue.’”
But it will continue.
In June, the Administration raised the nation’s debt ceiling for the 91st time — freeing the federal government to keep borrowing and spending its way deeper into debt.
And according to the Peter G. Peterson Foundation, this means “fewer economic opportunities for Americans. Rising debt reduces business investment and slows economic growth. It also increases expectations of higher rates of inflation and erosion of confidence in the U.S. dollar.”
The question is, how did we get here?
Every year, the government spends more than it takes in. And every Administration has increased the national debt.
But in the last few years, the national debt has ballooned to unsustainable levels.
Prior to this recent debt surge, America’s economy was high on easy money.
For at least a decade, ultra-low interest rates made it easier for Americans to borrow and spend.
Investment portfolios grew…
Home values blossomed…
And the stimulating “wealth effect” created a feeling of optimism we all enjoyed.
Then, the pandemic swept the nation.
Businesses closed and jobs vanished…
Tax revenues fell through the floor…
Supply chains faltered…
The Fed’s printing presses went into overdrive and flooded the system with money…
And inflation soared.
Now, the Fed is raising interest rates…
The national debt is growing faster than the economy…
The federal government is already paying almost $2 billion in interest payments per day...
And unless they find a solution, it’s easy to see how they might find themselves locked in a borrow-and-spend cycle for the foreseeable future.
To make matters worse, the government is facing increasing Medicare, Medicaid and Social Security costs because Baby Boomers are retiring and living longer.
And according to the Mises Institute, “These three entitlement programs consume about fifty cents of every federal budget dollar…”
What’s the solution?
So far, the government hasn’t devised a workable long-term plan to handle rising costs and bring in enough revenue to pay down the debt.
But in the short term, the Administration is calling for almost $5 trillion in new and increased taxes.
According to the Congressional Committee on Ways and Means:
“President Biden is proposing his biggest tax hike to date — $4.7 trillion that will fall on small businesses and hardworking Americans.”
Senate Finance Committee Ranking Member Mike Crapo warns, “If realized, these plans would create a tax regime that would lead to some individuals handing over more than half of their paychecks to the government…”
In other words…
The economic burden on families across the country may increase and may soon grow almost too heavy to bear.
“Thus, the country is on a collision course with financial reality,” says Forbes Senior Contributor Mike Patton. “How long will Americans tolerate the reckless spending, which permeates Washington?”
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