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National News See other National News Articles Title: Breaking down the coming $20 trillion debt Tsunami Consider that, according to the Congressional Budget Office’s own forecasts, the United States will add another TWENTY TRILLION DOLLARS to the national debt through 2033. Now, 2033 is a REALLY important date, because it also happens to be the year that Social Security’s primary trust fund completely runs out of money. See also Have You Ever Wondered Why There Is An Endless River Of Sewage Coming Out Of Washington D.C.? Social Security is funded in large part by workers who contribute a portion of their paychecks into the program through the FICA/payroll tax. Social Security uses that tax revenue to pay monthly benefits to retirees across the country. And any surplus left over is rolled into a special trust fund. Over time, the accumulated surplus in the trust fund amounted to roughly $3 trillion dollars; and all that money was invested in interest-bearing government bonds. Between the payroll tax contributions and the trust fund’s interest income, Social Security always ran a healthy surplus. Until recently. Starting in 2020, there were so many retirees receiving Social Security benefits that the program barely broke even for the year. The following year, 2021, was even worse. Social Security ran a deficit for the first time ever and had to dip into its trust fund to make ends meet. This trend kept up in 2022 and 2023 as well. In fact, the program loses so much money now that its trust fund is shrinking rapidly, and Social Security projects it will fully be depleted by 2033. One of the many, many reasons this is so important is because Social Security will no longer be a BUYER of US government bonds. It will be a SELLER. And that’s a big deal. For the past 90+ years, Social Security always invested its annual surplus into government bonds… which essentially gave politicians an extra pile of cash each year to spend. But now this cash flow will reverse. Instead of Social Security sending its surplus to the Treasury, the Treasury Department now must repay the debt that it owes to Social Security. This nearly $3 trillion repayment will happen gradually over the next ten years. And then, of course, in 2033, Social Security will be out of money and require a multi-trillion-dollar bailout. Unfortunately, the Treasury Department doesn’t have the money to repay this $3 trillion debt, let alone another $5 to $10 trillion to bail out Social Security. This means that, in addition to the $20 TRILLION in new debt that the CBO is projecting over the next ten years, the Treasury Department will have to borrow an ADDITIONAL $3 trillion to repay Social Security. And then even more to bail out the program (So, this means that the government will need to find someone to buy $23++ trillion of government bonds over the next ten years… which is just an absurd amount of money. And it will have to do this at a time when it has lost some of its biggest investors; again, Social Security can no longer afford to buy bonds. And many of America’s biggest foreign bondholders, including China and Japan, are also not buying any more bonds. So, who is going to buy all this new debt? The only realistic option is the Federal Reserve. And this is nothing new for the Fed. During the pandemic, for example, the Fed magically created about $4 trillion in new money, then used that money to buy US government bonds. Of course, their $4 trillion in new money also helped create the highest inflation in four decades. So, if buying $4 trillion of government bonds led to 9% inflation, what’s going to happen when the Fed has to create $20+ trillion to buy government bonds? And by the way, the CBO’s $20 trillion estimate on new government debt is probably a bit too optimistic. It assumes there will be no new war, no pandemic, no national emergency, and no idiotic legislation that causes even crazier spending. If any of those were to happen over the next decade, the increase to the national debt would be even higher… meaning the Fed would have to create even MORE money. $20+ trillion is a ton of debt. And with no other realistic option other than the Federal Reserve to buy that debt, it’s easy to make a very strong argument for substantial inflation a few years down the road. Poster Comment: Worse than he says. Did not mention the trillion dollar interest on the debt bill. Deficit this year could be $3 trillion plus. Also Student debt defaults are added to the debt. Post Comment Private Reply Ignore Thread
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