While Americans tighten their belts, the government is a pig in the trough

With inflation rampant, these have been incredibly tough years for Americans. Your actual disposable personal income is belowtheir personal savings (measured by the personal savings rate) is belowand they have record household debt.

Faced with this reality, Americans must tighten their belts. Whether it’s cutting back on entertainment, replacing how and what they eat, or otherwise, when financial times are tough, many Americans are forced to make difficult decisions and compromises.

The government does none of this. With a real deficit of 2 trillion dollars for the 2023 fiscal year (after an accounting adjustment), the US Treasury Department recently announced announced that it would need to borrow $776 billion this quarter and another $816 billion next quarter to keep the government functioning.

For those who can’t do quick math, that’s almost $1.6 trillion over the next six months.

And of course, the interest rates to finance this debt continue to rise, making the entire financing more and more expensive.

You don’t have to be an economist or financial analyst to know that this is not sustainable. The International Monetary Fund said America’s financial situation was unsustainable. The Treasury Department and the Congressional Budget Office have said the same thing in recent years. The crisis is clear to almost everyone – everyone except those in charge.

While Americans look for ways to save, the government continues to feed like a pig at a trough.

In a current one interviewInvestor Stanley Druckenmiller said this father once told him, “If you’re in a hole, stop digging,” while criticizing the government’s reckless spending policies. Yet the government continues to pass around picks and shovels.

Of course, Druckenmiller is exactly right – and he is far from the only financial expert to raise the alarm. US federal deficits are around 8% of GDP, which is an insane level at any time, but even more so now that we are in a period of economic “expansion” (that is, deficits should grow as the economy grows shrink).

The national debt is heading towards $34 trillion, which corresponds to a debt level of more than 120% of gross domestic product. The IMF has previously determined that U.S. debt becomes too high for a country when it reaches about 70 to 80% of gross domestic product. If the United States did not have the world’s reserve currency – a status and privilege that other countries are attacking as you read this – we would likely be in a full-blown currency crisis.

Are the Fed, Treasury and Congress all in denial? Are they more incompetent than 10 people you can pick at random on the street? Are they intentionally trying to destroy the US economy? Or are they hoping they can patch everything together just long enough to reap as many rewards for themselves as possible and blame the next person when it all falls apart?

It was time to get serious years before. Now it is imperative. Call your representatives. Organize peaceful marches to the Fed, Treasury, and Congress. Make this a top priority in all your conversations. The Americans had to make sacrifices, but those in charge are not making any. That has to change immediately.

Laura Coffey

Laura Coffey is a Worldtimetodays U.S. News Reporter based in Canada. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Laura Coffey joined Worldtimetodays in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing: LauraCoffey@worldtimetodays.com.

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