USA reaches $20T debt for the first time ever

The U.S.A. has just reached an ominous financial milestone: $20 trillion in national debt.

Since 2002, our elected officials have increased the debt by $14 trillion. Believe it or not, our government has been spending roughly $930 billion more every year than we have taken in tax receipts. Over the past 20 years, our national debt has quadrupled, far outstripping the rate of growth in America.

ZeroHedge notes that “history is full of examples of once-dominant civilizations crumbling under the weight of their-rapidly expanding debt, from the Ottoman Empire to the French monarchy in the 1700s.” How long can the economic, military and social dominance of the U.S. be sustained? Sadly, not long. Especially if our strength is fueled with spiraling debt to foreign nations like China and the ability of central bankers to print endless reams of paper money.

A BURDEN WE ALL SHARE

According to the Hill, an independent Congressional research service, each American’s share of our $20 trillion debt totals $166,000. Add in unfunded liabilities including Social Security and Medicare, and each one of us is on the hook for $875,000!

There is plenty of finger pointing these days in Washington. However, this huge bar tab is one that both parties clearly share responsibility for. Our debt has skyrocketed because of economic stimulus packages, big tax cuts and wars:

1.The 2007 Great Recession brought on by the collapse of the housing market was met with stimulus programs and huge bank bailouts. In fiscal years 2009-2012, deficits exceeded $1 trillion.

2.Since the September 11, 2001 terrorist attacks, the U.S. has spent $805 billion in Iraq and $783 billion in Afghanistan waging war. In fact, these two wars alone account for $2 trillion of the debt.

3. Tax cuts during the Reagan, Bush and Obama years resulted in less money flowing into government coffers.

Despite the clear and present danger to our national health, the gravy train continues to roll. The U.S. Treasury reports that the U.S. government’s budget deficit for the first ten months of fiscal year 2017 was $566 billon. This is larger than the entire GDP of Argentina!

A TEMPORARY REPRIEVE JUST MEANS MORE DEBT

The overwhelming pressure of last week’s debt ceiling crisis was relieved temporarily on Friday when President Trump and Congress cut a deal to suspend the current debt ceiling (set at $19.8 trillion) until December. Then they plan to set the new limit wherever the debt is then. How convenient!

This is the equivalent of being maxed out on your credit cards, when suddenly a credit card company decides to let you charge away as much as you like for three months, then resets your limit at your new debt level.

Clearly, complacency is not your best strategy when the world’s greatest country owes $20 trillion. Especially with the kind of leadership that allows the debt to spiral away without check.

AGING U.S. POPULATION MEANS MORE DEBT

Looking ahead, U.S. debt is projected to rise even more as the government spends more money on programs for our country’s aging population.

The costs of entitlement programs such as Social Security and Medicare are going to explode in the years ahead. According to the Congressional Budget Office (CBO), if Trump and Congress were to do nothing, debt could rise to 150% of the total economy in 2047.

Average citizens need to hold their politicians accountable and tackle government waste and fraud. But the sad truth is that the top four line items in the U.S. government’s budget that account for 90% of government spending are interest on the debt, the military, Medicare and Social Security. There is little or no chance any of these spending areas will be reduced.

If we default on our debt, the risks to paper-based markets could be catastrophic.

If you are willing to risk your paper-based, fiat paper wealth that politicians and central bankers will solve the $20 trillion debt crisis, you don’t need a Plan B.

But if you think that the debt crisis is a sign of even more trouble ahead, you need to consider adding physical gold and silver to your retirement assets now before we hit the next recession or, even worse, a U.S. government debt default.