25 July 2023
The US is grappling with a monumental public debt issue, with the debt amount soaring by a staggering $57.2 billion in a mere span of four days. Recently, the total debt crossed the $32 trillion mark on June 16th, and by July 20th, it had already jumped an additional $590 billion, reflecting the gravity of the problem.
David Rubenstein, a prominent billionaire investor, shared his insights on Bloomberg TV, offering a bleak assessment of the situation. He expressed that the US might resort to inflation as a method to manage this escalating debt, which can severely magnify income inequality in the country. Such an approach will disproportionately impact those at the lower income levels, as they often struggle more with the adverse effects of inflation compared to wealthier individuals.
In addition to this, Rubenstein flagged the rising tensions between different socio-economic and age groups. He forecasts a clash between the older population, who are living longer but have inadequate retirement benefits, and the younger generation who are facing the burden of providing for these retirees. Social security and other crucial endowment programs are insufficiently funded, exacerbating this clash and potentially leading to further social unrest.
The problem doesn’t end domestically. Rubenstein also highlighted the waning dominance of the US in the global economy, with countries such as China and India swiftly catching up and potentially overtaking the US in the foreseeable future. This inevitable shift poses an additional threat to the living standards of both the rich and the poor in the US, implying an impending lowering of the overall lifestyle.