Fairly soon, the U.S. will owe $35Tn of dollars in government debt, and the lack of fiscal discipline is pushing the national debt to grow by $1Tn every 100 days. The interest expense, the cost of servicing that debt, is now $1.1Tn, almost 5% of US GDP, and as you can see below, the trend is almost vertical. It’s curious to see the U.S. dollar strengthening against other currencies, over the last month, but that may not be the right comparison. Gold is above $2200, and that’s an indication that Congress is playing with fire with the national debt. Everybody seems to be betting on AI and other disruptive technologies to solve the debt problem, and it might well be the case, but we’re dangerously putting a lot of pressure on an economy at a very delicate time. Ironically, the only other option to decrease debt over GDP, is inflation, and we’re furiously fighting against it.
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