Well, folks… it’s happened. The U.S. FED has officially announced that – for the first time in history — the United States of America has crossed the $8 trillion debt mark.
The news broke this past Thursday as the U.S. central bank published their holdings data. It’s hard to point the finger at any one person for this travesty as every administration for at least the past 20 years has only made the U.S. debt crisis worse. Spanning back (at the very least) to the massive expenses taken on by the United States with the initiation of the Iraq War during the George W. Bush administration, followed by the massive overspending of the Obama administration, made worse by the globe being hit with a massive virus that resulted in the stimulus check initiatives and pandemic related expenses started under the Trump administration that continue through to this very day.
A Long History of Debt
For anybody playing the markets during the 2008 crash, you will well remember what happened when the government begins to lose control over its spending habits. When an individual citizen begins spending too much, the banks and the government can step in to get them back in line, but who will step in when the United States itself begins to spend too much? During the 2008 crash, it was the leadership of then Treasury Secretary Henry Paulson that the U.S. narrowly escaped yet another Great Depression… This time, many officials predicted the results of the 2008 crash would be considerably worse than the market crash of 1929, though.
Due to Paulson and his team, the United States narrowly escaped a very dire situation in 2008… Much worse than the already impactful recession that we did find ourselves in the middle of. Don’t think that this is a story of mere history, though. As national debts continue to rise with no plan to pay for them, it’s only a matter of time before the United States finds themselves back on the financial chopping block.
It’s worth noting that the Trump team worked very hard to help make the United States as strong and financially independent as possible during their term. By working to make the country self-sustainable with the opening of the Keystone Pipeline (a decision later revoked by Biden) and asking that other nations start carrying a little more financial responsibility instead of leaning on the helping hands of the U.S. economy, the Trump White House was fast approaching a potential solution to the economic slump made worse by his two predecessors.
Despite the successes of the often passed over first two years of the Trump administration, a time in which the markets and the economy as a whole were finally beginning to soar once again, by the end of his one term stint in the Oval Office, Trump found himself overwhelmed by a global pandemic that resulted in giant steps backwards for the progress he and his administration had seen during their first two years in office.
Will Biden Step Up?
Today it’s up to the Biden administration to take a stand against these rising expenses the country has continued to accrue. Starting out his term with the approval of yet another stimulus check to the American public (which only made the national debt crisis even worse) Biden will need to find a way to help dig the country he loves out of the massive hole they currently find themselves in if he wants to avoid a potential future economic meltdown. Naturally, his approach to such issues has historically been to suggest the raising of American taxes. An issue that is already in debate under the domes of Washington’s historic buildings (… read more on that HERE.)
The Wrap Up…
The markets look to end this week on a high note… A great step in the right direction after over a year of pandemic related economic struggles. But don’t let a few good days distract you from the big picture. Our leaders need to step it up and look for reliable solutions to our country’s overwhelming deficit. Unless someone takes the “bull by the horns” here, we could soon find ourselves in a situation that would make 2008 look like a cake walk.
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