A bipartisan group of U.S. lawmakers, including Senators Mitt Romney (Republican of Utah) and Joe Manchin (Democrat of West Virginia), as well as Representatives Bill Huizenga (Republican of Michigan) and Scott Peters (Democrat of California), has sounded the alarm about the rapidly escalating national debt of the United States.
In an opinion piece published on The Hill, lawmakers have declared the national debt the “greatest threat” facing the country.
National debt surpasses the $34 trillion mark
The United States’ national debt has recently surpassed the staggering $34 trillion mark, increasing by over $82 billion since the beginning of January. This ominous milestone has raised concerns about the long-term consequences of the country’s fiscal challenges.
The national debt equates to over $100,000 per citizen and a staggering $264,000 per taxpayer. Moreover, the official U.S. Federal budget deficit has reached a daunting $1.75 trillion, according to tracking data, exacerbating the fiscal crisis.
In their article, the bipartisan lawmakers assert that the current trajectory of the national debt is unsustainable and requires immediate attention. They emphasize that this issue extends beyond economics, as it poses the “greatest threat” to the nation, rapidly approaching a crisis point.
To address this fiscal challenge, the lawmakers have proposed the establishment of a bipartisan fiscal commission. This commission would undertake a comprehensive review of the federal budget, closely scrutinizing both spending and revenue sources, leaving no stone unturned in the quest for solutions to strengthen the country’s fiscal health and meaningfully decrease the national debt.
Social Security on the brink
Highlighting the gravity of the situation, the lawmakers warn that if the status quo is maintained, Social Security could become insolvent in less than a decade, leading to an automatic 24 percent cut in benefits. This potential crisis looms large for millions of Americans who rely on Social Security as a critical source of income during their retirement years.
Financial analysts have also raised concerns about what they call a “debt death spiral” in the United States. Some have cautioned that the Federal Reserve may be forced to resume money printing, potentially causing the U.S. dollar to weaken and boosting the price of cryptocurrencies like Bitcoin, which could compete with traditional hedges like gold.
Christopher Wood, the global head of equity strategy at Jefferies, has emphasized that Bitcoin and gold are crucial hedges against the return of inflation. He believes that G7 central banks will struggle to exit from unconventional monetary policies and will likely continue expanding their balance sheets in some form.
Global debt surge
The United States is not alone in facing a daunting debt challenge. The Institute of International Finance (IFF), representing major global banks and financial institutions, reported that global debt has surged to an astonishing $307 trillion. This increase of more than $10 trillion in the first half of the year reflects a “staggering” $100 trillion rise in global debt over the past decade.
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