As we continue to kickoff trading in 2025, concerns are mounting over the US debt bomb, but the beneficiary will continue to be the gold market.
US Debt Continues Exploding Higher
January 23 (King World News) – Gerald Celente: The U.S. will run a $1.9-trillion budget deficit in this fiscal year, on top of the $36 trillion the country already owes, the nonpartisan Congressional Budget Office (CBO) reported. Over the next 10 years, the national debt is on trend to grow by another $21.1 trillion, or 58 percent.
The national debt is now 100 percent of GDP. By 2035, it will reach 118 percent, the CBO calculated.
That is the optimistic outlook.
It assumes that the broad tax cuts enacted in 2017 expire this year as scheduled. However, Donald Trump has called for them to be extended, something a Republican-controlled Congress almost certainly will agree to.
If the tax cuts remain in place, the 10-year deficit will be $4 trillion greater, according to the CBO.
Trump, the incoming Congress, and Democratic politicians have paid little attention to the deficit and debt and offered no specific ideas about how to reduce it or to pay for the extended tax cuts.
“The federal government has a significant spending problem driving deficits,” Scott Bessent, Trump’s treasury secretary-designate, said in his confirmation hearing earlier this month. “We must work to get our fiscal house in order.”
Trump has appointed Elon Musk and Vivek Ramaswamy to operate a “Department of Government Efficiency,” chaired by MAGA enthusiast Marjorie Taylor Greene. However, it has no official standing or power to act and will serve only as an advisory group, although probably an effective one.
Trump has said that federal income from his broad new range of high tariffs will make up any budget shortfall created by extending current tax cuts or enacting new ones.
However, a new, universal 20-percent tariff on all goods imported into the U.S. would raise only $3.3 trillion over 10 years, not enough to fill the $4-trillion hole created if current tax cuts are continued, the nonpartisan Tax Foundation reported.
Joe Biden had proposed adding more than $80 billion to the Internal Revenue Service’s budget to hire skilled auditors to pursue wealthy tax evaders. However, the new Republican Congress is expected to make even more cuts to the agency’s budget. The IRS should use its budget to upgrade its technology, not chase rich tax dodgers, Bessent has said.
TREND FORECAST:
Another election round has passed with little attention paid to the national debt. Interest on that debt is the federal government’s third-largest expense this year, costing more than veterans’ services, Medicaid, and net outlays for Medicare combined.
As the debt mounts, interest eats a larger share of the federal government’s tax income. That will force politicians to borrow more and incur more interest charges in a debt-based death spiral.
As we have said before, politicians are not rewarded for promising to cut services to their constituents. Therefore, with no pressure from the public to rein in spending, the only brake on a spendthrift Congress will be an economic disaster on the scale of the Great Recession that poses an existential threat to the economy.
It is possible that, eventually, enough officeholders will realize the increasing danger posed by the debt bomb and act to defuse it. The odds are against that happening.
King World News note: As the global debt bomb, not just US debt bomb, continues to inflate, the beneficiary of the reckless government spending will be the price of gold. It is headed many thousands of dollars higher over time, but the big surprise of 2025 will be the price of silver hitting new all-time highs. 2025 will also mark the end of the doldrums for the gold mining stocks which will begin to radically outperform gold. This trend will last for many years.
Just Released!
To listen to one of Michael Oliver’s most important predictions ever discussing an imminent explosion higher in gold and silver prices CLICK HERE OR ON THE IMAGE BELOW.
Just released!
To listen to Alasdair Macleod discuss why gold is set to skyrocket and why the dollar surge will be catastrophic for the global economy in 2025 CLICK HERE OR ON THE IMAGE BELOW.
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