The Rising Cost of U.S. Debt

Oct 17, 2023

The United States national debt recently rose to a historic high of $33 trillion. That's right, you heard it right, I said trillion. What are the long term consequences of this trend, and how does it impact your retirement? Because it's so hard to comprehend numbers so big, a good way to understand the national debt is to personalize it by imagining that you are the United States Government.

So if that were the case and you move the decimal point a lot of digits, you would be earning $49,000 a year. That's all the revenue that's coming in. But your spend is $63,000 a year. The difference of $14,000 is known as the annual deficit. And that would, in essence, be put on your credit card. And you keep this up for all of the years the United States has, you would result now in $330,000 of credit card debt. Also, imagine that at minimum, you have to pay the interest on that debt in order to be able to keep borrowing money. And today, the average interest rate over all that debt is almost 3%, which means out of the $63,000 you're spending each year, $6,600 is needed just to pay the interest payments so that you can keep borrowing money in the future.

As the Federal Reserve continues to raise rates, the amount of interest payments will go up over time and start to reduce the amount of spending on all the other things in the federal budget, like Social Security and Medicare. This way of looking at government spending isn't perfect because, for example, unlike you in your real life, you just can't print more money to bring in more revenue, but it does help to illustrate the point that what we are doing is not sustainable.

Eventually, there will not be enough money to pay out all the obligations that the government has, including social Security and Medicare. Then the federal government will need to raise taxes to pay for those obligations to you, or cut benefits or delay your retirement.

One way to reduce the risk of your retirement is not to depend on these government programs for your entire retirement. Start retirement savings now. And make sure you diversify those investments so that they are not all dependent on the federal government making all the right financial decisions for our country. In addition to Social Security, I have several retirement plans, like pensions from former employers, individual IRAs, my Thrift savings plan when I was in the federal government, I have cash value life insurance plans, and I also have precious metal IRAs.

My gold IRA is from U.S. Money Reserve. If you're interested in exploring this option to protect your retirement investments from any negative impact of our federal debt, then call 1-866-646-8465 and ask to speak to a U.S. Money Reserve IRA specialist.


Sign up now for latest executive insights and latest news delivered right to your inbox.

  • This field is for validation purposes and should be left unchanged.

Related Articles

Growing Personal Debt Spells Potential Trouble

Growing Personal Debt Spells Potential Trouble

Here's something I learned while working in Washington, D.C.: when everyone seems to agree on a fact, it's time to get skeptical and go to the data. Here's a recent example. If you follow the business news, you know that consumer debt has climbed to the levels that...

read more