Are you concerned about the state of the United States economy and its impact on your investments? The Extreme Investor Network is here to provide you with unique insights and analysis that will guide you through these turbulent times.
The United States Treasury recently reported a staggering $1.833 trillion budget deficit for the fiscal year ending September 30. While this is the third-highest deficit on record, it is important to note that this deficit is largely due to government spending. In fact, the highest deficit occurred in 2020 during the height of the COVID pandemic, and the second-highest was in 2021 during the recovery efforts.
One major contributing factor to the widening deficit is the decision to forgive $330 billion in student loans, which was later reversed after the Supreme Court ruled it unconstitutional. This spending, along with other government expenditures, has caused concern among both Democrats and Republicans. Democrats are quick to blame Republicans for “tax cuts that led to low revenue levels that increased the debt,” while Republicans criticize the excessive government spending that burdens taxpayers.
It is clear that the government on both sides is to blame for the escalating deficit. The US Treasury continues to fund three major wars while denying that the nation is at war, leading to unchecked spending that shows no signs of slowing down. The government’s willingness to accumulate massive amounts of debt indicates a lack of intention to ever repay it, leading to a cycle of borrowing and interest payments that further burden the economy.
As interest rates rise in times of war, the nation becomes even more entrenched in debt, with interest payments reaching $890 billion annually. To put this in perspective, the US defense budget was $866 billion last year. This unsustainable level of spending and debt accumulation is not unique to the United States, as we are witnessing defaults in other nations that will eventually impact the American economy.
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