The U.S. government's budget is the biggest in the history of the world and is growing at an uncontrollable rate. In the latest Bloomberg Intelligence research, strategists wrote that there will be more increases in Treasury coupon auctions and T-bills outstanding moving forward. "Besides deficits of over $2 trillion in the foreseeable future, climbing maturities following the increase of issuance from March 2020 will also need to be refinanced," the authors said. Also, the Congressional Budget Office estimated that the cumulative deficit for the 2024–2033 period will total $20.2 trillion, or 6.1 percent of gross domestic product. Deficits are expected to be at least 5.5 percent of GDP every year for the coming decade.
Doug Casey, best-selling author and world-renowned speculator discussed with International Man, a source of unique information for freedom seekers, the major drivers that push the nation to the verge of economic downturn.
"The biggest expenditures for the U.S. government are so-called entitlements. Are people entitled to the government paying for their health, retirement, and welfare? In a moral society, the answer is: No," Casey said. "Entitlements destroy personal responsibility, legitimize theft, destroy wealth, and create antagonisms." He explained further that once people have an "entitlement," they come to rely on it. "It's a shame because many have come to rely on the State, not entirely through their fault. The U.S. has become pervasively corrupt," he further pointed out. Casey even remarked that Social Security and Medicare should be abolished.
"The government, as an instrument of force, should be limited to protecting people from physical force. And nothing else," he explained. "That implies a police system to defend people from force within, a military to defend against foreign aggressors, and a court system to allow people to adjudicate disputes without resorting to force." For him, Social Security seemed like a good idea at first but it has become a classic Ponzi scheme. "Its taxes have gone from a trivial percentage to 12.4 percent. It's so high that people who are on the bottom end of society are precluded from saving on their own. Social Security is both a practical and moral disaster," he argued. "As for Medicare, how is it your problem if another has failed to take care of his body? Should the government have anything to do with health? No. It's strictly a matter of personal responsibility." (Related: City of Birmingham declares bankruptcy, shuts down nonessential spending after being hit with $950 million equal pay claims.)
He went on to tackle the excessive defense expenditures, which according to him exceeds that of the next 10 nations combined, including Russia and China. Casey pointed out that two decades ago, there were 30 or 40 defense companies but now they have consolidated, the better to deal with Big Government, he said. Casey said that high-tech weapons, in the process of bankrupting the government and enriching the defense establishment, will be proven largely useless in today's environment. "Meanwhile, military personnel are being gutted. Services can't recruit enough people to keep their numbers. The military is no longer a meritocracy. Now, it's critical to be the right color and gender." Also, he emphasized that defense spending is a provocation to other countries. "It's like waving around a giant golden hammer."
On the issue of the net interest expense on the national debt being $659 billion in FY 2023 that is sure to rise, he commented: "The U.S. can no longer generate adequate capital to fund the government's debt. In the recent past, the national debt has been financed not by Americans, but by foreigners." However, foreigners no longer want to own the debt of a bankrupt entity whose currency is nothing but a floating abstraction, he added. "The government can only finance its debt by selling it to its central bank, the Fed, which creates new dollars to buy the debt."
Casey exposed that the country is already bankrupt and it is not just the official $34 trillion, it could be higher. "Frankly, there's no practical way out at this point except to officially declare bankruptcy," he said but suggested things that the administration can consider.