We’ll See Deficits at $40 Trillion in a Few Short Years – Here’s Why & How

…The levels of global and U.S. debt are way beyond concerning. They’re also way beyond being repayable.

Did you know that our very own Federal debt has been doubling about every two administrations or every eight years…and, at this rate, the $20 trillion debt that Trump walked into when inaugurated in early 2017 could be close to $40 trillion in early 2025, when his second term is up (if he survives in the White House through the crash of a lifetime, that is).

We’re well on the way too. Our Federal debt is already up $1.5 trillion in the last two years, and these are supposed to be the “good times.” When the shit hits the fan early in 2020, that number is going to explode into the stratosphere. That’s what happens to deficits during bad times. They increased 122% (more than double), in the aftermath of 2008. 2020 will be infinitely worse, so debt growth will respond accordingly.

This first chart gives us an idea of what this looks like:

The average over-spending from off-budget items like veterans benefits or Iraq/Afghanistan wars, or pollution clean-up, is 45% a year.

Look at how much more the total deficit was from the operating deficit in 2008. The total Federal deficit was 122% more than the operating budget deficit that year. That’s what happens when you suddenly get a deep recession. Now imagine what that number could look like when a depression like the early 1930s sets in. That’s what I expect we’ll see at the end of this “dark window”…

Our current $21.5 trillion debt is 14% higher than it would be at $18.8 trillion without these overruns – and that’s just the last 10 years. That’s nearly $3 trillion higher and makes the difference between 106% of GDP and 93%.

History shows us that more than 80% is considered dangerous and slows GDP growth substantially. In 2008, it was a mere 68% of GDP…

The Worst is Ahead

A growing number of people are alarmed at our deficits and debt, me included. It’s spiraling out of control, and the worst is still ahead as the Baby Boom hits peak retirement into 2029. Those forecast Social Security and Medicare deficits will be worse than imaginable as the economy continues to slow due to near zero workforce growth and low productivity related to aging.

…Is $40 trillion by 2025 even possible? Unfortunately, yes. This means you need to pick your investments with great care and prepare your business now. If you’re ready, you can take advantage of the sale of a lifetime ahead.

Editor’s Note: The above excerpts* from the original article have been edited ([ ]) and abridged (…) for the sake of clarity and brevity. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)