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When you click on these links and make a purchase, I may receive a commission at no additional cost to you.
I only promote companies that I have personally used or researched and believe will add value to our readers.
Disclosure:
The content I provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision.
Also, note that every investment comes with its own risks and drawbacks. Lastly, I would like to remind you that past results cannot guarantee future returns.
The content I provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision.
Also, note that every investment comes with its own risks and drawbacks. Lastly, I would like to remind you that past results cannot guarantee future returns.
US Debt to GPD Is Out Of Balance
The US Debt to GPD is 129%, (Source) the HIGHEST IT HAS EVER BEEN. The previous high was 124.73% recorded in 2020, the first year of the Biden Administration. It did drop to 110.39% (in 2022), but has been on the rise ever since.
The LAST time the debt to GPD ratio was over 100% was right after World War II when it topped 119%. It slowly went down to a low of 31% (in 1981 with President Reagan's Tax Cuts).
This ratio is important because investors worry about default when it's greater than 77%. That's the tipping point, according to the World Bank.
FYI: The top 4 nations with the highest Debt to GPD (Source) are:
Japan……….….264%
Venezuela……..241%
Sudan……….….186%
Greece……….…173%
The one thing to note about all these countries is that their economies are in the tank, particularly Venezuela and Greece, but with Japan and Sudan's economies also in a bad way.
The above countries Debt to GPS are so far out of sync that it will take years, or even decades before their economies are able to recover.
The Debt-to-GDP ratio gives investors, economists and leaders a tool for gauging the ability of a countries ability to pay off it debt(s).
A ratio of 100% indicates just enough output to pay debts, while a lower ratio means enough economic output to make debt payments.
A ratio of OVER 100% means that a country isn't producing enough to pay off its debt.
With the US Debt to GPD at $129% (and rising), it may be dangerously close to not being able to pay their obligations.
The question to ask is: What happens if there is a World Wide Recession, Depression, Epidemic, or, God forbid, a world wide war?
The LAST time the debt to GPD ratio was over 100% was right after World War II when it topped 119%. It slowly went down to a low of 31% (in 1981 with President Reagan's Tax Cuts).
This ratio is important because investors worry about default when it's greater than 77%. That's the tipping point, according to the World Bank.
FYI: The top 4 nations with the highest Debt to GPD (Source) are:
Japan……….….264%
Venezuela……..241%
Sudan……….….186%
Greece……….…173%
The one thing to note about all these countries is that their economies are in the tank, particularly Venezuela and Greece, but with Japan and Sudan's economies also in a bad way.
The above countries Debt to GPS are so far out of sync that it will take years, or even decades before their economies are able to recover.
The Debt-to-GDP ratio gives investors, economists and leaders a tool for gauging the ability of a countries ability to pay off it debt(s).
A ratio of 100% indicates just enough output to pay debts, while a lower ratio means enough economic output to make debt payments.
A ratio of OVER 100% means that a country isn't producing enough to pay off its debt.
With the US Debt to GPD at $129% (and rising), it may be dangerously close to not being able to pay their obligations.
The question to ask is: What happens if there is a World Wide Recession, Depression, Epidemic, or, God forbid, a world wide war?
Now The Bad News
The cost to service the US National debt, (not paying it down) has passed the $1 Trillion dollar mark (Source) and is NOT SLOWING DOWN, but is accelerating!
At current rate of spending, the U.S. national debt will grow by an astounding rate of about $1 trillion every 100 days, equal to roughly $3.6 trillion per year.
At current rate of spending, the U.S. national debt will grow by an astounding rate of about $1 trillion every 100 days, equal to roughly $3.6 trillion per year.
Now For The
REALLY BAD NEWS
The U.S. Dollar is FIAT money (FIAT MONEY SYTEM DEFINED) AND ONLY HAS VALUE IF ITS CITIZENS BELIEVE IT HAS VALUE.
HOW MUCH VALUE DOES WILL THE THE DOLLAR HAVE WHEN IT'S CITIZENS REALIZE IT HAS NO VALUE BECAUSE OF THE MASSIVE DEBT WE ARE CARRYING?
And that WILL HAPPEN when the U.S. Government can no longer service that debt AND Fully PAY its other obligations?
Obligations Like: Medicare, Defense Discretionary, Medicaid, Other Mandatory, and Income Security?
Think Hyper Inflation. I cannot see into the future to predict how much value the dollar will lose, but it will affect EVERYONE, especially those on Fixed incomes or those with Paper IRAs.
HOW MUCH VALUE DOES WILL THE THE DOLLAR HAVE WHEN IT'S CITIZENS REALIZE IT HAS NO VALUE BECAUSE OF THE MASSIVE DEBT WE ARE CARRYING?
And that WILL HAPPEN when the U.S. Government can no longer service that debt AND Fully PAY its other obligations?
Obligations Like: Medicare, Defense Discretionary, Medicaid, Other Mandatory, and Income Security?
Think Hyper Inflation. I cannot see into the future to predict how much value the dollar will lose, but it will affect EVERYONE, especially those on Fixed incomes or those with Paper IRAs.
Note From The Author Of This Website:
My research on the National Debt has been a real eye opener. There are those individuals who claim that the cost of the national debt is low and is NOT a threat to the US Economy or Dollar. I cannot possible see how the is true. The debt is increasing at such a pace that in another 10 years the interest payment could consume 75% of taxable income.
Beyond Scary.
My research on the National Debt has been a real eye opener. There are those individuals who claim that the cost of the national debt is low and is NOT a threat to the US Economy or Dollar. I cannot possible see how the is true. The debt is increasing at such a pace that in another 10 years the interest payment could consume 75% of taxable income.
Beyond Scary.