by Peter Schiff, Schiff Gold:
The national debt has pushed above $27 trillion.
The US government has added over $3 trillion to the national debt this year alone and there is no sign that the borrowing and spending will stop.
In fact, most people don’t even seem to care.
The debt surged above $27 trillion on Oct. 1. It barely even got a mention in the mainstream media.
Most people blame the coronavirus pandemic for the surging debt. But the Trump administration was running up massive deficits before COVID-19 reared its ugly head. It simply continued and accelerated the spending problem inherited from the Obama administration. The truth is the federal government was spending as if there was a major economic crisis before the current economic crisis.
The proof is in the numbers.
In fiscal 2019, the Trump administration ran the fifth-biggest deficit in history. Through the first two months of fiscal 2020, the deficit was already 12 percent over 2019’s huge Obama-like number and was on track to eclipse $1 trillion. Prior to 2020, the US government had only run deficits over $1 trillion four times, all during the Great Recession. We were approaching that number prior to the pandemic, despite what Trump kept calling “the greatest economy in the history of America.”
The national debt has grown by over $7 trillion since President Trump took office. When Trump moved into the White House in January 2017, the debt stood at $19.95 trillion. It topped $22 trillion in February 2019. That represented a $2.06 trillion increase in the debt in just over two years. By November 2019, the debt had eclipsed $23 trillion. The US government has already added well over $3 trillion to that number this year alone.
The debt-to-GDP ratio currently stands at 137.73%. Despite the lack of concern in the mainstream, debt has consequences. Studies have shown that a debt to GDP ratio over 90% retards economic growth by about 30%. This throws cold water on the Republican mantra “we can grow ourselves out of the debt.”
According to a recent CBO report, on the current trajectory, the size of the national debt will be nearly double the size of the US economy by 2050.
Despite the warning signs, nobody seems inclined to address the rising levels of debt. Even as the fiscal 2020 budget deficit surged past $3 trillion, more than double the previous record deficit, US Treasury Secretary Steve Mnuchin called for more federal spending, saying “now is not the time to worry about shrinking the deficit.”
That raises the question: when exactly is the time? Because the Trump administration wasn’t worried about the debt when the economy was supposedly good.
As Peter Schiff put it in a podcast, “When we had the strongest economy, or they were telling us that we had the strongest economy in the history of the world, were we worried about the debt then? No. Did we do anything about the debt then? No. Well yes, actually we did do something about the debt. We made it bigger.”