The U.S. Treasury Department has made some significant financial decisions that could affect your retirement savings, and we want to ensure you understand the implications. This five-minute read explores the Growing Fiscal Deficit, “Bidenomics”, the Growing Federal Debt, and provides a roadmap to hedge your wealth in the face of a looming Uncertain Future.
A Growing Fiscal Deficit:
The fiscal deficit for this year is approaching nearly 2 trillion dollars, representing a 23 percent increase in just one year. A substantial portion of this deficit can be attributed to the federal government’s spending, with a significant chunk going towards addressing the ongoing pandemic and making investments in infrastructure and social safety nets.
“Bidenomics,” as described by President Biden, focuses on growing the economy from the middle out and the bottom up. It aims to support American workers, lower costs, and promote small businesses. To fund these initiatives, the administration has proposed tax increases on higher-income individuals and businesses.
What’s concerning is that even with the expected government receipts of 4.4 trillion dollars, the deficit remains high due to a slowing economy and ineffective tax increases. If the government had returned to pre-pandemic spending levels, we might have had a balanced budget. Instead, government spending is up by 38 percent compared to pre-Covid times.
The Shift in Deficit Reporting:
The Treasury Department recently reported that the deficit is one trillion dollars lower than when President Biden took office. However, this figure is somewhat deceptive. The inflated spending levels from 2020 were meant to be one-time emergency funds, but the current administration has incorporated them into the budget, making 6 trillion dollars the new norm.
The deficit was technically reduced by 300 billion dollars when the Supreme Court blocked the student loan relief plan. However, this money has been reallocated for spending in fiscal year 2024. This practice of moving funds from one column to another is concerning.
Growing Federal Debt:
The level of federal debt now exceeds 33.5 trillion dollars. The pace of borrowing is increasing, with the Treasury borrowing 500 billion dollars in just the first three weeks of the current fiscal year. The cost of servicing this debt has also risen, surpassing the budgets of the Social Security Administration and the Department of Health and Human Services. Interest payments alone now exceed all military spending in the Department of Defense’s budget by 103 billion dollars.
The Uncertain Future:
The Biden Administration seems committed to a path of continued government spending and multi-trillion-dollar deficits. Financial markets are starting to realize the challenges ahead. Trillions of dollars in existing debt with low-interest rates will roll over at rates two to three times higher in the new year.
This creates a debt spiral that will cost the Treasury, and ultimately the taxpayer, over 1 trillion dollars in interest during the current fiscal year. While the Treasury claims that “Bidenomics” is working to build the economy from the middle out and the bottom up, the reality is that many Americans are struggling with high rents and substantial credit card debt.
In these uncertain times, it’s essential to take control of your financial future. At Reagan Gold Group, we assist Americans to obtain Physical Gold and Silver assets that support a diversified financial portfolio, act as a hedge against inflation, and support people through tough economic times. It is not too late to make a tangible investment in these precious metals that have historical value passed from generation to generation. Book a FREE consultation to get started. This is the time for all Americans to intervene and take ownership of their own wealth with no interventions. Contact Reagan Gold Group today and find out more about the preservation of your wealth.
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