Doesn’t anyone get tired of this? As the 2016 campaign season kicks off, voters will be inundated with promises from politicians. Promises that they cannot possibly keep. The reality is, the next president will inherit a debt crisis. The only thing that could prevent the debt from getting progressively worse is a set of austerity policies and entitlement reforms. Things that are politically impossible to implement.
According to the Concord Coalition, the next president will assume office with “annual deficits consistently rising, starting at $455 billion in 2017, increasing to $763 billion in 2021, and to over $1
trillion in 2025.”
The grim long-term projections from the Congressional Budget Office suggest that we may enjoy another year or two of calm before the coming storm. The debt tsunami that is building will cause mass financial destruction as the U.S. credit rating gets downgraded. Interest rates will rise. The dollar will plummet.
The fastest growing category of federal spending? Not Defense or Homeland Security. Not even Social Security or Medicare. Interest on the debt will increasingly become the biggest chunk of federal outlays. And there’s not a thing the next Congress or the next president can do about it short of defaulting on the debt and/or taking away benefits that have already been promised to
millions of people.
The Next President’s Debt Crisis – Ugly
At some point painful reforms will be forced on the political system by global financial markets. If politicians won’t rein in their unsustainable programs, then the dollars in which all the government’s debts and entitlement promises are denominated will take the hit. Dollar depreciation – and perhaps an eventual dollar crash – will be the reform the markets impose on Washington.
At some point gold and silver prices will spike to new record highs and beyond as precious metals reassert their safe-haven status. Now is the time to hold on tight to your metals stash. Accumulate more if you are able, and be patient as the debt crisis plays out during the next president’s term in office.