47 Percent Of GDP – This Is Definitely The Scariest Corporate Debt Bubble In U.S. History

We are facing a corporate debt bomb that is far, far greater than what we faced in 2008, and we are being warned that this “unexploded bomb” will “amplify everything” once the financial system starts melting down.  Thanks to exceedingly low interest rates, over the last decade U.S. corporations have been able to go on the greatest corporate debt binge in history.  It has been a tremendous “boom”, but it has also set the stage for a tremendous “bust”.  Large corporations all over the country are now really struggling to deal with their colossal debt burdens, and defaults on the riskiest class of corporate debt are on pace to hit their highest level since 2008.  Everyone can see that a major corporate debt disaster is looming, but nobody seems to know how to stop it.

At this point, companies listed on our stock exchanges have accumulated a total of almost 10 trillion dollars of debt.  That is equivalent to approximately 47 percent of U.S. GDP

A decade of historically low interest rates has allowed companies to sell record amounts of bonds to investors, sending total U.S. corporate debt to nearly $10 trillion, or a record 47% of the overall economy.

In recent weeks, the Federal Reserve, the International Monetary Fund and major institutional investors such as BlackRock and American Funds all have sounded the alarm about the mounting corporate obligations.

We have never witnessed a corporate debt crisis of this magnitude.

Corporate debt is up a whopping 52 percent since 2008, and this bubble is continually growing.

And actually the 10 trillion dollar figure is the most conservative number out there.  Because if you add in all other forms of corporate debt, the grand total comes to 15.5 trillion dollars.  The following comes from Forbes

Total corporate debt is actually much higher. Adding the debt of small medium sized enterprises, family businesses, and other business which are not listed in stock exchanges ads another $5.5 trillion. In other words, total US corporate debt is $15.5 trillion, 74% of US GDP.

Needless to say, this mountain of corporate debt is definitely not sustainable, and I have already noted that defaults are rising.  One expert recently explained that all of this debt is “an exploded bomb” and that at some point something will come along to “trigger the explosion”…

“We are sitting on the top of an unexploded bomb, and we really don’t know what will trigger the explosion,” said Emre Tiftik, a debt specialist at the Institute of International Finance, an industry association.

Right now a lot of large corporations are so maxed out that they can barely service their debts.  So when things start getting really bad for the economy, we could be facing a wave of defaults unlike anything we have ever seen before.

When asked about what this will mean during the next recession, a finance professor at the University of Pennsylvania warned that it will “make everything happen faster, larger, worse”

“It’s going to amplify everything,” said Krista Schwarz, a finance professor at the University of Pennsylvania’s Wharton School. “It’s going to make everything happen faster, larger, worse. The recession would just be that much deeper.”

It sounds like she could be a writer for The Economic Collapse Blog.

Of course I am being a bit silly, but the truth is that there is nothing silly about the giant mountain of debt that our society is facing.

In addition to our looming corporate debt crisis, U.S. consumers are 14 trillion dollars in debt, state and local government debt levels are at record highs, and the U.S. national debt just hit the 23 trillion dollar mark.

If you can believe it, we have actually added another 1.3 trillion dollars to the national debt just since last Thanksgiving

The federal debt has increased by $1,303,466.578.471.45 since last Thanksgiving, according to data released by the U.S. Treasury.

That is the largest Thanksgiving-to-Thanksgiving increase in the debt in nine years. The last time the debt increased more from Thanksgiving to Thanksgiving was in 2010, when it increased by $1,785,995,360,978.10.

It also equals approximately $10,137.48 per household in the United States.

Adding 1.3 trillion dollars to the national debt in 12 months while things are still relatively stable is utter insanity, and what we are doing to future generations of Americans is beyond criminal.

And we aren’t even spending the money well.  In fact, Senator Rand Paul continues to document how we are wasting money in some of the most ridiculous ways imaginable

Sen. Rand Paul is continuing to expose the rampant waste of tax dollars by our government agencies. In a special Fall edition of his Waste Report, the Kentucky senator highlights some of the most wasteful expenditures of our federal government, including a half-a-million-dollar toilet nobody could use and a $22 million project to bring Serbian cheeses up to international standards.

“Once again, The Waste Report takes a closer look at just some of what the federal government is doing with the American people’s hard-earned money, this time including stories of it continuing to turn over so many taxpayer dollars to the Washington Metropolitan Area Transit Authority, funding research that involves hooking Zebrafish on nicotine, buying textbooks for Afghan students that are subpar or sitting in warehouses, and more in a list that totals over $230 million,” states a press release from Sen. Paul’s office.

Of course it isn’t just the United States that is drowning under an ocean of red ink.  As Bloomberg has detailed, when you total up all forms of debt in the world it comes to a grand total of 250 trillion dollars…

Zombie companies in China. Crippling student bills in America. Sky-high mortgages in Australia. Another default scare in Argentina.

A decade of easy money has left the world with a record $250 trillion of government, corporate and household debt. That’s almost three times global economic output and equates to about $32,500 for every man, woman and child on earth.

So if you have a household of four, your share comes to $130,000.

Are you ready to pay up?

In the end, all of this debt will never be paid off.  Instead, the bubble will just keep ballooning until it inevitably bursts.

And when it finally bursts, many are warning of a complete and total meltdown.  In fact, Rick Ackerman believes that “a Mad Max scenario” is likely…

Ackerman contends, “I am a little more bearish than that. I see a Mad Max scenario as inevitable. . . . I try not to think about it because we’ve all got lives to live and kids to raise. . . . When you go back to the calculous of deflation and that every penny of every debt must be paid, if not by the borrower then by the lender, we have already put ourselves into a condition where Social Security is going to fail. Medicare is going to fail. All the ‘just-in-time’ deliveries are going to be in jeopardy. Food from the grocery stores, one day shipping from Amazon, I don’t see how all these things can continue to operate in a condition other than in the false prosperity that we have now. We are at the pinnacle of affluence.”

I haven’t been able to find anyone that can logically argue that the road that we are currently on has a positive ending.

The truth is that we are headed for complete and total disaster, and the only real debate is about how long it will take for us to get there.

So enjoy these moments of relative stability while you still can, because it is only a matter of time before we go over the precipice.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The U.S. National Debt Just Hit The 23 Trillion Dollar Mark As We Continue To Steamroll Toward Financial Oblivion

This week, the U.S. national debt reached the 23 trillion dollar mark for the first time ever.  There was no fanfare, there were no politicians giving speeches about fiscal responsibility, and there has been very little national outrage.  We have simply come to accept that it is “normal” for our national debt to grow at an exponential rate, but the truth is that we are literally committing national suicide.  Given enough time, there is no doubt that this colossal mountain of debt will kill our Republic, and yet fiscal responsibility is not even a major national issue any longer.  Everyone seems to be okay with the fact that we are stealing more than 100 million dollars every single hour of every single day from future generations of Americans and destroying the bright future that they were supposed to have.  What we are doing to our children and our grandchildren is beyond criminal, and yet very few of us seem to care.

At this point things are so bad that even Fed Chair Jerome Powell is warning Congress that the national debt is a major problem

Federal Reserve Chairman Jerome Powell warned lawmakers Wednesday that the ballooning federal debt could hamper Congress’ ability to support the economy in a downturn, urging them to put the budget “on a sustainable path.”

Powell suggested such fiscal aid could be vital after the Fed has cut its benchmark interest rate three times this year, leaving the central bank less room to lower rates further in case of a recession.

When a major downturn hits the U.S. economy, the federal government is not going to be able to do much because we are already spending money at emergency levels.

Of course Powell shouldn’t exactly be criticizing Congress, because the Fed has already been using up all of their ammunition too.

So when the next recession officially arrives, the amount of intervention that will be possible will be very limited.

Since Barack Obama’s inauguration, we have been adding an average of more than a trillion dollars to the national debt every year.  That is utter insanity, but it has helped the economy in the short-term.

When the federal government borrows money that it does not have and spends it into the economy, that boosts economic activity.  But at the same time it makes our long-term financial problems even worse.

If we were to go back and remove from the economy the 12.4 trillion dollars that the federal government added to our national debt since Obama’s inauguration, we would be in the deepest economic depression in American history right now.

So all of that reckless spending has kept us from economic disaster, but it has set the stage for something even worse when this bubble finally bursts.

In October, the federal government’s budget deficit for the month was $134.5 billion.  That was 34 percent higher than for the same month a year earlier.

I can’t even begin to describe how foolish this is.  The extreme negligence being committed by our politicians in Washington is mind blowing.

And this is just the beginning of our problems.  As our population ages, Social Security, Medicare and other entitlement programs are going to become rapidly more oppressive

This is only going to get worse. According to Census Bureau projections, by 2030 each 100 working-age Americans will be supporting 35 retirees, and this could rise to 42 by 2060. Another way to think of this is to calculate the number of retirees each worker must support. In 1946, the burden of one retiree was shared between 42 workers. Today, according to the SSA, roughly three workers cover each retiree’s Social Security and Medicare benefits. By 2030, however, there will be only two workers supporting each retiree.

So where are we going to get the money that we need to support those programs?

Of course we aren’t actually going to make it to 2060.  Our entire system will implode long before then.

Consumers have also been on a tremendous debt binge in recent years, and we just learned that total U.S. household debt is about to cross the 14 trillion dollar mark

Americans increased their borrowing for the 21st straight quarter as more households took out loans to buy homes or refinance existing mortgages, according to a report released today from the Federal Reserve Bank of New York.

Total U.S. household debt rose $92 billion, or 0.7%, to $13.95 trillion in the third quarter, the New York Fed’s quarterly household credit and debt report showed.

We are in the final stages of the biggest debt bubble in the history of the world, and most of us realize that this chapter in our history is going to end very badly.

So why do we just keep making things worse?

Of course it isn’t just the United States that is drowning in debt.  According to the IMF, total global debt has now reached the 188 trillion dollar mark…

The global debt crisis has reached epic and historical proportions.  It’s now $188 trillion, which is more than double the entire economic output of the entire planet.

The global debt load has surged to a new record of around 230% of the world’s output, IMF chief Kristalina Georgieva said according to a report by the Daily Mail The entire globe’s economic stability is hanging by a thread, and this news makes that thread appear just a little thinner.

Most people don’t understand that the global financial system has literally been designed to create as much debt as possible.  But once you grasp this, it shouldn’t actually be a surprise that we are now 188 trillion dollars in debt.  The system is simply doing what it was intended to do.  For much more on this, please see my previous article entitled “Global Debt Is Up To $188,000,000,000,000 – This Is Officially The Biggest Debt Bubble The World Has Ever Seen”.

For decades, we have been ignoring the future consequences of running up so much debt, but at some point time is going to run out.

In a recent article, Ron Paul put it this way

Even though the federal deficit is already over one trillion dollars (and growing), President Trump and Congress have no interest in cutting spending, especially in an election year. Should he win reelection, President Trump is unlikely to reverse course and champion fiscal restraint. Instead, he will likely take his victory as a sign that the people support big federal budgets and huge deficits. None of the leading Democratic candidates are even pretending to care about the deficit. Instead they are proposing increasing spending by trillions on new government programs.

Joseph Zidle, a strategist with the Blackstone investment firm, has called the government — or “sovereign” — debt bubble the “mother of all bubbles.” When the sovereign debt bubble inevitably busts, it will cause a meltdown bigger than the 2008 crash.

As usual, Ron Paul is right on the mark.

And actually “a meltdown bigger than the 2008 crash” would be a best case scenario.

Ultimately, it is extremely doubtful that we are going to be able to survive what is going to happen to us once this bubble completely bursts.

The Republic that previous generations of Americans sacrificed so much to build is being systematically destroyed, and it is our own greed that is doing it.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

Global Debt Is Up To $188,000,000,000,000 – This Is Officially The Biggest Debt Bubble The World Has Ever Seen

The world is now 188 trillion dollars in debt, and that number continues to grow rapidly each year.  It is a form of enslavement that is deeply insidious, because most of those living on the planet do not even understand how the system works, and even if they did most of them would have absolutely no hope of ever getting free from it.  The borrower is the servant of the lender, and the global financial system is designed to funnel as much wealth to the top 0.1% as possible.  Of course throughout human history there has always been slavery, and the primary motivation for having slaves is to extract an economic benefit from those that are enslaved.  And even though most of us don’t like to think of ourselves as “slaves” today, the truth is that the global elite are extracting more wealth from all of us than ever before.  So much of our labor is going to make them wealthy, and yet most people don’t even realize what is happening.

Let’s start with a very simple example to help illustrate this.

When you go into credit card debt and you only make small payments each month, you can easily end up paying back more than double the amount of money that you originally borrowed.

So where does all that money go?

Well, of course it goes to the financial institution that you got your credit card from, and in turn that financial institution is owned by the global elite.

In essence, you willingly became a debt slave when you chose to go into credit card debt, and the hard work that it took to earn enough money to pay back that debt with interest ended up enriching others.

On a much larger scale, the same thing is happening to entire nations.

Today, the United States government is nearly 23 trillion dollars in debt.  In essence, we have been collectively enslaved, and we have been obligated to pay back all of that money with interest.  Of course at this point it is literally impossible for us to ever pay back all that debt, and every year we add another trillion dollars or so to the balance.  The global elite are now extracting more than 500 billion dollars in interest from this debt on an annual basis, and it is expected that number will greatly escalate in the years ahead.

It is not an accident that the Federal Reserve and the federal income tax were both instituted in 1913.  The Federal Reserve system was designed to create an endless debt spiral that would get the federal government in as much debt as possible, and since that time the size of our national debt has gotten more than 7000 times larger.  And the federal income tax was needed as the mechanism through which our wealth is transferred to the government to service all of this debt.

It is truly a deeply, deeply insidious system, and the American people should refuse to back any politician that does not favor shutting it down, but at this point this isn’t even a major political issue in our nation.

And of course the United States is far from alone.  Even though we can’t get the whole world to agree on much of anything, somehow virtually the entire planet has been convinced that debt-based central banking is the way to go.

In fact, at this point 99.9 percent of the population of the world lives in a country that has a central bank.

According to Wikipedia, there are only 9 very small nations that do not have a central bank at this point…

-Andorra
-Isle of Man
-Monaco
-Nauru
-Kiribati
-Tuvalu
-Palau
-Marshall Islands
-Federated States of Micronesia

If you combine the populations of all of those 9 nations together, it comes to much less than 0.1% of the total global population.

Do you think that this is just a coincidence?

The global elite do not want humanity to be free.  They want us to be in as much debt as possible so that we can make them richer.

When you realize how badly the game has been rigged, then a lot of things start to make a whole lot more sense.

For example, for those that understand how the system works it is certainly not surprising that the total amount of debt in the world has hit a new all-time record high of 188 trillion dollars

The global debt load has surged to a new all-time record equivalent to more than double the world’s economic output, IMF chief Kristalina Georgieva warned Thursday.

While private sector borrowing accounts for the vast majority of the total, the rise puts governments and individuals at risk if the economy slows, she said.

“Global debt — both public and private — has reached an all-time high of $188 trillion. This amounts to about 230 percent of world output,” Georgieva said in a speech to open a two-day conference on debt.

That number has risen by 24 trillion dollars since 2016, and it is the biggest debt bubble that the world has ever seen by a very wide margin.

Of course at some point this debt bubble is going to burst in a global disaster of epic proportions, but meanwhile the global elite are going to continue to milk all of us for as long as they possibly can.

Here in the United States, we have been on the greatest debt binge in the history of our nation since the last financial crisis.  U.S. government debt has more than doubled, state and local government debt has ballooned to ridiculous proportions in much of the nation, corporate debt has doubled, student loan debt has more than doubled, auto loan debt just keeps hitting new record highs, and U.S. consumers are now 14 trillion dollars in debt.

Our mountain of debt has become so colossal that the only way to keep the game going is to borrow even more money, but by borrowing more money we make our enslavement even worse.

Meanwhile, those that are holding our debt just continue to live the high life as they laugh all the way to the bank.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

America’s Financial Suicide: The Budget Deficit Rises 26% In 1 Year As Federal Spending Spirals Wildly Out Of Control

We are in the process of committing national financial suicide, and most Americans don’t seem to care.  As  you will see below, the federal budget deficit for the fiscal year that ended on September 30th was the largest in 7 years.  In fact, it was actually 26 percent larger than last year.  Federal spending is wildly out of control, and “non-discretionary spending” is projected to go through the roof in the years ahead.  Under our current system, it is literally going to be impossible to turn things around.  As the Baby Boomers continue to retire, the amount of resources demanded by Social Security, Medicare and other entitlement programs is going to continue to escalate dramatically.  Meanwhile, the biggest bureaucracy in the history of the world just continues to get even larger with each passing year, and neither political party seems interested in trying to do anything about it.  Our national debt will shortly hit 23 trillion dollars, but we will never actually pay it off.  Instead, we will just keep piling on more debt until this entire charade comes crashing down like a house of cards.

At this point, we shouldn’t expect the Democrats to show any concern for our skyrocketing national debt.  During the Obama years the national debt increased by an average of more than a trillion dollars a year, and this unprecedented spending helped to stabilize the U.S. economy following the Great Recession.

However, if we could go back and remove the 9.3 trillion dollars that was added to the national debt during Obama’s time in office, those eight years would have been the worst eight years economically in the history of our nation.  We borrowed mountains of money from the future in order to make the present more pleasant, but in the process we literally destroyed the bright future our children and our grandchildren were supposed to have.

Of course most Americans don’t understand any of this, and many people look back on “Obama’s economy” with great fondness.

But isn’t Trump essentially doing the same thing?

Of course he is.

Just like Obama, Trump doesn’t want to preside over “a second Great Depression”, and so he is perfectly fine with taking our national debt into the stratosphere.  If we tried to live within our means and only spent the money that we actually brought in, the U.S. economy would immediately collapse.  And if the U.S. economy fell to pieces, Trump would have no chance of winning again in 2020, and we all know that Trump desperately wants to win the next election.

In the old days there were at least some Republicans that actually seemed to care about our financial future.  The Republican Party was supposedly “the party of fiscal responsibility”, and a big driver of the Tea Party movement was concern about the size of our national debt.

But these days very, very few Republican leaders are making a peep about our rapidly growing mountain of debt.  Instead, most of them seem absolutely fine with the fact that we are literally destroying ourselves financially.

This is yet another example that shows that there really is not that much of a difference between the two political parties at this point.  One may want to take us down the tubes a little faster than the other one, but the final destination is still the same.

I would love to hear any Republican voter make a rational defense for what we are witnessing right now.  According to the Congressional Budget Office, the federal budget deficit was 984 billion dollars during the fiscal year which just ended on September 30th…

The federal budget deficit for 2019 is estimated at $984 billion, a hefty 4.7 percent of gross domestic product (GDP) and the highest since 2012, the Congressional Budget Office (CBO) said on Monday.

The deficit was 205 billion dollars bigger than the previous fiscal year, and overall that represented an increase of 26 percent in just one year.

Of course the official “budget deficit” is a bit misleading, because it actually understates the amount by which our national debt increases.

According to official U.S. Treasury numbers, our national debt actually increased by 1.113 trillion dollars during the fiscal year that just ended.

Adding more than a trillion dollars to the national debt in a single year is certainly not “conservative”.

Can anybody out there possibly defend such recklessness?

If you think you can, please feel free to give it a shot.  Sadly, the truth is that all of our politicians that have supported such irresponsible spending should be completely and utterly ashamed of themselves.  What they are doing to future generations of Americans is beyond criminal, and if future generations of Americans get the chance they will look back and curse us for what we have done to them.

As our founders understood very well, government debt is a way for one generation to literally steal money from future generations.  And as Jason Pye has noted, our “unsustainable situation is only going to get worse”

“Democrats and Republicans must be held responsible for the outrageous deficit reported today by the CBO,” said Jason Pye, vice president of legislative affairs at the conservative advocacy group FreedomWorks.

“This unsustainable situation is only going to get worse,” he added.

Unfortunately, there really isn’t anything to be done at this point.  Now that fiscal irresponsibility has become the official position of both major political parties, all that we can really hope for is that the coming financial implosion will be put off for as long as possible.

In the short-term, the Federal Reserve will undoubtedly attempt to stabilize things.  In recent days they have begun to start wildly printing money once again.  They aren’t calling it “quantitative easing”, but that is essentially what is going on.  The Fed balance sheet is beginning to rise at an exponential pace, and this “emergency intervention” that they are conducting is starting to look more permanent with each passing day.

Sadly, it is just another indication that our financial sins are starting to catch up with us.  Previous generations handed us the keys to the most powerful economy in the history of the planet, but that wasn’t good enough for us.  We always had to have more, and in our endless greed we have created the largest debt bubble in the history of the world.

Now we stand on the brink of oblivion, and yet our addiction to debt is so strong that we just can’t help ourselves.

There is no way that this story is going to end well, but even at this late hour most Americans still don’t realize what is coming.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep.  I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters.  (#CommissionsEarned)  By purchasing those books you help to support my work.  I always freely and happily allow others to republish my articles in written form on their own websites as long as this “About the Author” section is included.  In order to comply with government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  You can follow me on social media on Facebook and Twitter.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of this website.

$220,000 For Every Man, Woman And Child – America Is Now 72 Trillion Dollars In Debt

Are you ready to cough up $220,000 to pay your share?  One of the reasons why a day of reckoning for the U.S. economy is inevitable is because we are in way too much debt.  The 22 trillion dollar debt that the federal government has accumulated gets most of the attention, but the truth is that we would still be 50 trillion dollars in debt even if the national debt was eliminated somehow.  Today, debt levels are exploding on every level of society.  Corporate debt has more than doubled since the last financial crisis, U.S. consumers are more than 13 trillion dollars in debt, and state and local governments are piling up debt as if tomorrow will never come.  According to a Federal Reserve chart that you can find right here, the total amount of debt in the U.S. financial system has now reached an astounding 72 trillion dollars.

My father was a math teacher for many years, and so I like numbers.

I divided $72,000,000,000,000 by the current population of the United States (Google says it is 327.2 million), and I discovered that it breaks down to more than $220,000 for every man, woman and child in the entire country.

So if you have a family of four, your share of all this debt is $880,000.

This debt bubble has been growing much, much faster than the overall economy for a very long time.  When Ronald Reagan took office the total amount of debt in our system was less than 5 trillion dollars, and when George W. Bush took office the total amount of debt in our system was just over 29 trillion dollars.

Just prior to the last financial crisis we surpassed the 54 trillion dollar mark, and so since that time we have added nearly 18 trillion dollars to our total.

Of course all of this debt will never actually be paid off.  The only thing left to do is to keep this debt bubble going for as long as possible, and the only way to do that is to keep it growing at a faster pace than the overall economy is growing.

And our financial engineers have definitely been successful in extending this Ponzi scheme for a lot longer than many of us had anticipated, but they can’t keep doing this indefinitely.

Every financial bubble in history has eventually ended, and this one will too.  I really like what Charles Hugh Smith had to say to Greg Hunter just the other day

Journalist and book author Charles Hugh Smith says the next market crash and recession will unfold like the bursting of the 2000 Dotcom bubble. Smith explains, “The bubble popped or deflated not for any crisis, but simply because there was too much debt, too much leverage, too much euphoria and unrealistic valuations. I think we are seeing that now in stocks, housing and a lot of other assets around the world. The valuations just exceed what makes financial sense. . . . And remember, we are at the longest expansion in history. It’s over 10 years, and the average expansion lasts 5, 6 or 7 years. So, this expansion is pretty long in tooth. . . . You will get a slowdown, and that is a self-reinforcing feedback loop. Once people stop buying houses and once people stop buying cars . . . then you are going to get people being laid off, less people being able to afford to eat out, and then you get a self-reinforcing recession. It’s not a crisis, but like an erosion because everybody is kind of tapped out.”

In the end, nobody can “fix” our system, because our debt-based financial system was fundamentally flawed when it was designed.  This is something that I have repeatedly pointed out, but unfortunately most Americans still don’t seem to understand this very basic concept.

If you have a financial system that is literally designed to endlessly create more debt, more money and more inflation, then you are living in a “bubble economy”.

And a “bubble economy” can seem fine as long as the bubble is inflating and economic activity seems to be humming along, but when things start to go bad they can go really, really bad very rapidly.

Individually, there is very little that we can do about our national debt, state and local government debt or corporate debt.  We can try to vote people into office that want to do the right thing, but unfortunately fiscal responsibility and financial reform are not hot button political issues right now.

But what we can do is get our own financial houses in order.  Now is not the time to take on more debt, and paying off any debt that you have already accumulated would be a very good thing.  This is something that Mac Slavo commented on in one of his recent articles

The real truth that no one seems to want to hear, is that those who took out these loans signed on the line and voluntarily entered into a contract.  If they didn’t understand the contract, it’s their responsibility (a big scary word) to ask or seek clarity before the agreement is made and signed. That’s called personal responsibility for your actions.  However, it’s lacking all over the globe, but particularly in the United States where people are always looking to blame others for their poor decisions that they themselves have made. “Blame the rich for my decision to go into debt and agree to bad terms!”

The debt crisis the U.S. has found itself in could very well cause another recession such as the one that started in 2008. This is exactly why personal wealth gurus such as Dave Ramsey and Future Money Trends‘ James Davis tell people to avoid debt if at all possible. Doing so will protect you when others start to default on their loans.  You can’t default if you haven’t borrowed money. It also won’t matter what type of predatory loans exist if people aren’t borrowing that money. Personal responsibility could help lead to more freedom. If people are not free to make bad decisions as well as good decisions, people are not free.

As for the nation as a whole, we can only hope that there is as much time as possible before the inevitable implosion comes.

For decades we have been making exceedingly foolish decisions, and the consequences of those decisions are going to be exceedingly painful indeed.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

As The Economy Teeters On The Brink Of A Recession, U.S. Debt Levels Are Absolutely Exploding

We now have official confirmation that the U.S. economy has dramatically slowed down.  In recent days I have shared a whole bunch of numbers with my readers that clearly demonstrate that a new economic downturn has begun.  And even though stock prices have been rising, the numbers for the “real economy” have been depressingly bad lately.  But what we didn’t have was official confirmation from the Federal Reserve that the economy is really slowing down, but now we do.  According to the Atlanta Fed’s GDPNow model, the economy is growing “at a 0.3 percent annualized rate in the first quarter”

The U.S. economy is growing at a 0.3 percent annualized rate in the first quarter, based on data on domestic construction spending in December released on Monday, the Atlanta Federal Reserve’s GDPNow forecast model showed.

For years, the goal has been to get U.S. growth above the key 3 percent threshold, but what this forecast is telling us is that economic growth is currently at one-tenth of that level.

That is just barely above recession territory.

So when I say that we are teetering on the brink of a recession, I am not exaggerating.

We also just got some really bad news about construction spending

Construction spending fell 0.6% in December from November, based on a seasonally adjusted annual rate, released today by the Commerce Department. Compared to December a year earlier, total construction spending inched up only 0.8% (not seasonally adjusted), the lowest growth rate since Oct 2011, coming out of the great recession.

Now we can add that to the list of all the other numbers that are telling us that very rough times are ahead.

Meanwhile, debt levels in the U.S. just continue to explode.

According to the latest report, Americans now have 480 million credit cards.  That is about 100 million more than during the last recession.

In other words, there are about 1.5 credit cards for every man, woman and child in the entire country.

The total amount of credit card debt in the United States has now reached a whopping $870,000,000,000.  That number has never been higher in the history of our nation.

And when you total up all forms of individual debt, U.S. consumers are now 13.5 trillion dollars in the hole.

Corporate debt levels are exploding as well, and this is something that Dallas Fed President Robert Kaplan warned about on Tuesday

U.S. nonfinancial corporate debt consists mostly of bonds and loans. This category of debt, as a percentage of gross domestic product, is now higher than in the prior peak reached at the end of 2008, Kaplan said.

A number of studies have concluded this level of credit could “potentially amplify the severity of a recession,” he noted.

The lowest level of investment-grade debt, BBB bonds, has grown from $800 million to $2.7 trillion by year-end 2018. High-yield debt has grown from $700 million to $1.1 trillion over the same period. This trend has been accompanied by more relaxed bond and loan covenants, he added.

Overall, corporate debt has more than doubled since the last financial crisis, and that is just one of the reasons why our financial system is far more vulnerable today than it was just before the last financial crisis.

This week we also learned that the federal budget deficit is exploding as well.  The following comes from Business Insider

According to a report from the Treasury Department released Tuesday, the budget deficit — that is the difference between what the federal government takes in and what it spends — hit $310 billion in the first four months of fiscal year 2019.

Fiscal years for the federal government run October through September, so the data reflects the shortfall from October 2018 through January 2019. Based on the data, the deficit increased by 77% compared to the same period the prior year.

A 77 percent increase in one year?

I don’t even have the words to describe how foolish this is.

We are on pace to add way over a trillion dollars to the national debt this year, and one of the big things fueling this horrific debt binge is our rapidly expanding interest payments

Finally, and perhaps most concerning, is that for the first four months of this fiscal year, interest payments on the U.S. national debt hit $192 billion, $17 billion, or 10% more than in the same four-month period last year and the most interest ever paid in the first third of the fiscal year. As Reuters’ Jeoff Hall points out, annualizing the $192BN interest expense means that the interest on U.S. public debt is on track to reach a record $575 billion this fiscal year, more than the entire budget deficit in FY 2014 ($483 BN) or FY 2015 ($439 BN), and equates to 2.7% of estimated GDP, the highest percentage since 2011.

But according to the proponents of modern monetary theory (MMT), we can spend as much money as we want because “deficits almost never matter”

Because MMT holds that government spending isn’t funded by taxes, the Green New Deal doesn’t include any measures to finance the very large, open-ended fiscal commitments it would undertake. According to MMT economists, the only possible danger from the resultant government debt would be inflation, which can usually be controlled with tools other than raising taxes. In other words, deficits almost never matter. So confident are they of their theory’s universal applicability that MMT proponents often respond to their critics with scorn.

If you can believe it, there are actually members of Congress that believe this stuff.  Of course the truth is that our national debt is an existential threat to the continued existence of our nation, and this is a point that I have made repeatedly.

The U.S. economy was in far better shape just prior to the financial crisis of 2008 than it is now, and today we are drowning in far more debt than we were at that time.

The stage is set for the most terrifying economic horror show in American history, and the clock is ticking away with each passing day.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Most Depressing Stat Of The Month: The U.S. National Debt Is About To Pass The $22 Trillion Mark

The U.S. national debt is wildly out of control, and nobody in Washington seems to care.  According to the U.S. Treasury, the federal government is currently $21,933,491,166,604.77 in debt.  In just a few days, that figure will cross the 22 trillion dollar mark.  Over the last 10 years, we have added more than 11 trillion dollars to the national debt, and that means that it has been growing at a pace of more than a trillion dollars a year.  To call this a major national crisis would be a massive understatement, and yet there is absolutely no urgency in Washington address this absolutely critical issue.  We are literally destroying the financial future of this nation, but most Americans don’t seem to understand the gravity of the situation that we are facing.

The Congressional Budget Office projects that the national debt and interest on that debt will both explode at an exponential rate in future years if we stay on the path that we are currently on.  According to the CBO, the federal government spent 371 billion dollars on net interest during the most recent fiscal year…

In fiscal 2018, the government spent $371 billion on net interest, while the Defense Department budget was $599 billion. Social Security benefits cost $977 billion, Medicare $585 billion and Medicaid $389 billion, according to the CBO estimates.

But the CBO said interest outlays’ rate of growth in fiscal 2018 was faster than that for the three mandatory federal programs: Social Security (up $43 billion, or 5 percent); Medicaid (up $14 billion, or 4 percent); and Medicare (up $16 billion, or 3 percent). In comparison, net interest on the public debt increased by $62 billion, or 20 percent.

The 371 billion dollars that we spent on interest could have been spent on roads, schools, airports, strengthening our military or helping the homeless.

Instead, it was poured down a black hole.

As interest rates rise, it is being projected that we will soon be spending more on interest on the national debt than we do on national defense.  And not too long after that, interest on the national debt will cost us more than the entire Social Security program each year.

The bigger our debt gets, the more interest we have to pay, and the CBO is projecting that we will add another 12 trillion dollars to the debt during the 2020s…

Washington has been drowning in red ink for years and it’s only going to get a lot worse over the next decade, a fresh government estimate shows.

The U.S. is likely to add $12 trillion in public debt from 2020 to 2029 through a combination of higher government spending and slower economic growth, according to the Congressional Budget Office.

Of course CBO estimates are almost always way too optimistic, and so reality will probably be a lot worse than that.

But if government debt is so bad, why do we just keep on accumulating more of it?

Well, the truth is that government debt always makes the short-term look better.  When the government borrows money and spends it into the economy, it increases GDP.  In essence, we are sacrificing our long-term prosperity in order for some short-term gain.

If we went back and removed the 11 trillion dollars that the federal government borrowed and spent over the last decade, we would be in the worst economic depression in American history right now.  But by stealing from the future, the federal government has been able to stabilize things.

Unfortunately, the future always arrives eventually, and our future is looking extremely bleak at the moment.

If we want to turn things around, we should not be afraid to learn from what other countries have done.  Switzerland and Sweden have both found a lot of success in managing their budgets by adopting very strict fiscal frameworks

What magic formula keeps the Swiss and Swedish fiscal houses in order?

In both cases, they adopted a comprehensive fiscal framework anchored by sensible fiscal targets and enforced by spending and tax limits. It allows them to live with prevailing economic cycles by pegging federal spending and debt to GDP — spending more when the economy is down, and less when growth is strong — and establishing a process for living within those goals.

But that would require discipline, and that is something that is severely lacking in our nation’s capital right now.

In fact, on the left it has become very trendy to say that the U.S. can never face a debt crisis because we can always “print more money”.  Here is one example

All lending to the U.S. government is done in dollars, and the Treasury controls the supply of that currency. It is literally impossible for America to face a pure debt crisis because it can always print enough money to pay its bills.

Again, that creates its own problems. Doing so would risk significant inflation which would almost certainly harm the country’s credit rating, making future borrowing more expensive. However, America structurally can’t reach a point where it doesn’t have the money to pay its debts; only a point where it prioritizes different concerns.

There is so much wrong with those two paragraphs that I don’t even know where to begin.

First of all, the U.S. Treasury does not control the supply of our currency.  The Federal Reserve does, and under normal circumstances more “Federal Reserve notes” do not come into existence unless a corresponding amount of U.S. debt is also issued.

In other words, the process of creating more money also creates more debt.  Most Americans simply do not understand that the Federal Reserve system was designed to be a perpetual debt machine, and it is the primary reason why we are now nearly 22 trillion dollars in debt.  During my run for Congress, abolishing the Federal Reserve was one of the key issues that I ran on, and we need to continue to educate the American people about these issues.

Because the truth is that the national debt is an existential threat to the future of this nation, and we are systematically destroying the very bright future that our children and our grandchildren were supposed to have.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters.  His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites all over the nation.  If you would like to republish his articles, please feel free to do so.  The more people that see this information the better, and we need to wake more people up while there is still time.

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