25 July 2023
US Secretary of Treasury, Janet Yellen, continues to rubber-stamp America’s growing debt, yet these checks miraculously clear. Despite the nation’s insolvency, this process persists, with Washington spending the borrowed money.
Yellen appears to live in an economic fantasy, recently claiming at a G20 meeting, “Our labor market is strong, I don’t expect a recession. The inflation data is encouraging.” This is despite the creation of low-quality jobs that won’t stimulate economic growth, increasing bank losses, and inflation data that is skewed by the draining of the Strategic Petroleum Reserve.
The economic reality is bleaker. The US government ran a budget deficit of nearly $1.4 trillion in the first 9 months of 2023, a 170% increase from last year. Interest on Treasury debt securities for the same period increased 25% to over $652 billion.
Since 2000, federal debt has risen over 480% while GDP has only grown 165%. The government’s reckless debt accumulation has left the US economy in a precarious state, with dilapidating infrastructure and social turmoil.
The interest on Treasury debt may soon pass $1 trillion, equal to outlays for Social Security, and more than combined spending on R&D, infrastructure, and education. Washington’s borrowing, spending, and subsequent rate hikes have jeopardized America’s future.