The US Debt Problem

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Hi Friends,

Today I would like to discuss one of the biggest problems of the US, the state of debt in the United States. This has been an outstanding problem for quite a while but right now it is quickly getting worse. As every year passes by our debt grows and currently, the annual deficit by the end of the decade likely to be is approximately $21.1 trillion. This will be piled up to the outstanding national debt at $36 trillion. Which is way too much debt.

It is likely that the recent election of Donald. J. Trump will result in tax cuts and tax breaks to be extended. He claims that his new plans for Tariffs we help get the revenue back from the tax cuts. But in reality, his Tariff plan will only make a small dent in the US deficits. President Trump plans on implementing a 20% total Tariff which is planned to generate over $3 trillion over 10 years.

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Extending the tax cuts from 2017 will cost an additional $4 trillion over the next ten years. By 2035, the debt as a share of the economy is likely to be at a record high at 118% of the economy. Trump wants to find ways to reduce government spending. One of the ways is he is going to create a department to reduce government spending. That is ironic to me because running this department is going to be factored into the budget. Additionally, the plans for this department do not have the power to influence spending and the budget. It is more of an advisory committee. It is not clear whether the recommendations will be taken into account.

At this time, President Trump plans to start collecting tariffs. These tariffs are collected on imports coming into the US. This will raise some revenue for the US government. The problem is that Trump is introducing tax breaks and extending tax cuts. These are going to lose $4 trillion over the next 10 years. Trump is expected to introduce new tax breaks and extend 2017 tax cuts. Trump claims that his tariffs will raise more funds. Although, they are only projected to raise $4 trillion if they put a hefty 20% universal tariff on all imports.

A lot of people agree that the US has a huge spending problem. Trump and his advisors are not concerned enough about the debt of the United States. I am frankly worried about this situation as the more we put this off, the more debt the US will have. If we continue at the current rate by 2050, we will have over $50 trillion of debt. We need to set a portion of the United States’s budget to pay off the national debt. Even if we just set aside $500 billion a year to pay off the national debt. Especially, if we don’t do anything to stop/pay off the debt. Trump has stated that he would try to help the debt situation.

The US debt is hurting the world. If we can do anything, big or small to stop or help the debt problem the US economy would be performing a lot better. I think the US government should at least try to get some of the debt paid off. Especially, they should not increase or extend the number of tax breaks and tax cuts. That is going to worsen the debt even more than it already is.

Anyway, thank you so much for reading this edition of Friday Finance. Thank you to all my subscribers for being part of Friday Finance and being such dedicated readers. In addition, I want to state that we have canceled our move to Substack and our site will remain at: fridayfinancedc.beehiiv.com. The emails we still be delivered to all your inboxes and there will be no change. Also, have a great week and I will see you next week.

Thanks,

Jacob Gans

Friday Finance