09/23/2024
The Financial Report of the United States Government projects that US taxpayers face over $73 trillion in long‐term unfunded obligations over the next 75 years.
You read that right: 73 TRILLION in unfunded obligations. And the report is known for being overly optimistic.
What does that mean for you?
➡️ #1 More Debt, More Taxes
There's no way around it.
More debt will lead to higher taxes—whether it’s through new legislation or inflation (which, as Milton Friedman said, is a form of taxation without legislation). It’s coming either way.
➡️ #2 More Debt, Higher Interest Rates
More debt raises the risk of default, so investors will demand higher interest rates to compensate for that risk.
That doesn’t just affect the federal government. When the government borrows more, it crowds out money that could be borrowed by citizens and private companies, driving up interest rates for everyone.
➡️ #3 More Debt, Less Innovation
Higher interest rates make it harder to fund the kind of crazy, experimental stuff that eventually becomes game-changing in the market.
➡️ #4 More Debt, Less Growth
Economic growth comes from productive investments—using capital to create more goods and services with fewer resources.
Government spending often does the opposite, taxing productive investments and subsidizing non-productive ones.
➡️ #5 More Debt, Lower Living Standards
Less innovation, slower economic growth, higher taxes, and more inflation. On top of that, the interest payments on the debt will squeeze the federal budget, hurting the quality of public services.
It's the perfect storm for a decline.
If debt is so bad, why isn’t this a core issue in the election?
The effects of rising debt are sneaky—it’s hard for voters to connect a weak economy to higher debt.
Plus, cutting spending is unpopular because it means going up against special interests. Who wants to be the politician that cuts government programs? Only Milei had the guts to do it.
Right now, most federal spending is tied up in Social Security and Medicare—the two things both major candidates have already promised not to touch.
This lack of courage to address the biggest threat to America’s future could cost us more than people realize.
A real fiscal crisis could bring down the Dollar Standard worldwide—with devastating effects on the standard of living for everyday Americans.
