I have written to you more times than I can count about how the US government’s own budget officials forecast a $20 trillion increase in national debt over the next ten years.
Remember, this isn’t some wild conspiracy theory. This was from an official projection released by the Congressional Budget Office (CBO) back in February.
Well, it turns out the CBO’s 10-year forecast is now much worse.
Two days ago, the CBO released an updated budget forecast. And the differences between their current forecast, and the one they released just four months ago, are pretty substantial.
Four months ago, the CBO projected that this Fiscal Year (FY24)’s annual budget deficit would come in at $1.5 trillion. Now they estimate it will be $1.9 trillion.
In other words, their deficit forecast became 27% worse in just four months.
More importantly, their forecast for the total accumulated deficit over the next ten years– which stood at $20 trillion just four months ago– has now increased to $22 trillion.
How could these numbers become so much worse in just four months?
Easy. These people at the CBO are not stupid. And estimating long-term budgets is actually a fairly straightforward process.
The Social Security Administration, for example, already knows how much they’ll be spending on benefits next year, the year after that, etc., because they have all the data about how many people were born in 1963, 1964, and so forth.
Similarly, the Treasury Department already has a good idea how much money they’ll have to spend paying interest on the debt this year, next year, etc. They know which government bonds will mature, and when. While there is some variability with respect to interest rates, budget officials can get reasonably close in estimating long-term interest costs.
The big X-factor in budget forecasts is Congress. From time to time, these people get together and pass some outrageously expensive legislation… like the Inflation Reduction Act. And these idiotic ideas are impossible for the CBO to predict.
And that’s the problem: in the last four months alone, Congress has piled on a bonanza of spending.
That’s not to say certain spending isn’t important. But there’s never any sacrifice or debate. They never say, “we want to prioritize X, which means we need to cut Y.” They just add more and more to the deficit.
And that’s why the CBO’s deficit forecast for this Fiscal Year (which ends in about three months) has exploded way beyond their estimate from just four months ago.
It’s the same with their ten-year projection; their forecasts become worse with each update.
For example, one thing they haven’t accounted for at all in their ten-year projection is that Social Security will run out of money during that ten-year window, triggering a multi-trillion-dollar bailout.
And that Social Security bailout is not included in this estimate. So, the $22 trillion figure could become much, much worse.
Even $22 trillion would mean the national debt reaching $57 trillion by 2034– an amount that would almost certainly result in the loss of the US dollar’s global reserve status.
$22 trillion in additional debt over the next decade also likely means that the Federal Reserve will have to essentially ‘print’ money in order to fund these deficits.
(And as we all experienced recently, a massive increase in US government debt fueled by a gargantuan increase in money supply from the Federal Reserve, creates lots of inflation.)
The growing national debt will likely also reduce America’s standing in the world, and we can already see that now. Adversary nations are running amok doing whatever they want with total impunity… because the US government has neither the money nor resolve to stop them.
It’s all completely and utterly pathetic.
I would point out that there is still a very narrow window of opportunity to fix this problem before it spirals out of control. But the time is now. This is not something that can be dealt with 10 years from now; in fact, most of that $22 trillion in new debt will be coming over the next 5-7 years.
But avoiding that fate will require a tremendous amount of discipline, focus, sacrifice… and the biggest missing ingredient of all: common sense.
America would need a government willing to prioritize productivity and economic growth over some destructive anti-capitalist, hyper-woke agenda.
And it goes way beyond who’s sitting in the White House. It’s 435 members of the House, 100 Senators, and countless agency heads.
It’s the (unelected) people at the Federal Reserve, and sadly, others outside government who have tremendous influence in setting national priorities.
This included CEOs who have embraced the woke left, and the media which consistently perverts what national priorities should be.
These are some of the key players who would need to be largely focused on the task at hand.
There is a lot on the line here, and what happens over the next 4-5 years will likely seal America’s fate.
If I’m honest, it’s not looking good. It’s hard to have confidence in the “leadership” and institutions right now. Maybe it will all change. Maybe voters, business, etc. will wake up. But I’m not holding my breath.
Obviously, the US still has a lot of incredible things going for it— a robust economy, and insanely large, diversified, deep capital markets.
But that’s what makes it so exasperating, especially those of us who were born and lived in a time of peak America. It’s difficult to watch them destroy something so incredible.
Realistically, though, there’s not really anything that people can do as individuals to change the system and turn the ship around.
But as individuals, we can absolutely take sensible steps to mitigate such obvious risks. And that approach makes more and more sense every day.
