Name: US Debt Crisis just got 10X WORSE
Uploaded: 2026-03-17T18:01:05.000Z
Duration: 13 min 45 s
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Past simple

The US debt crisis just got 10 times worse.

Future simple

The Congressional Budget Office that annually releases forecasts for the next 10 years just forecasted that the US debt is going to cross $64 trillion within the next 10 days.

The superlative

And that is probably the worst estimation that the Congressional Budget Office has ever made.

And that is because last year has been a complete catastrophe for the US Budget.

The way that the government spends money is first it raises that money from taxpayers.

But if that money is not enough to spend because the government for some reason has cut taxes, then the government has to find a way to raise money.

These bonds are primarily sold to the general public and the government raises the money to to close the deficit.

And this report is raising the alarm because the deficit this year is going to be $1.9 trillion.

This is not because we are in a state of a world war.

This is not because we are in a state in a crisis, but

And by 2036 it is going to cross to $3.1 trillion.

So the real question, right, why would the deficit almost double within the next 10 years?

The public debt is going to rise from 101% of the GDP to as much as 120% of the GDP by 2036.

So the government has two types of debts.

The intra governmental debt, and this is where the government owes money to itself and a public debt.

This is the debt that the general public owns.

This is when the Federal Reserve buys the government bond.

This is when you hear the news that Japan holds $1.2 trillion of U.S. debts.

When the government owes money to itself, it's not a big deal because the government cannot possibly default just because it owes money to itself.

Just because one government agency owes money to another government agency.

The real problem comes is when the government owes money to the general public and it struggles to pay that debt.

Now at this point, everybody knows that the United States government does not even intend to pay that debt.

All that matters at this point is how much interest payments does the government can possibly afford.

If we go beyond that number, it is over for the US Government.

If you owe today $100,000 in credit card debt and your annual payments, let's say it's a 20% and you're paying 20,000 dol.

These 20% interest payments are not a real burden.

Yes, you don't actually feel great for paying them, but

Nonetheless, you're making $300,000 and you can easily afford the extra $20,000 in interest payments.

But if you make like $80,000 and you're paying $20,000 in interest payments, that is when you're in trouble.

And that is the situation that the US Government right now is headed to.

And this projection is not because the US Government is going to see or witness hyperinflation, but

rather, according to them, inflation is going to return to a rate that is slightly higher than the Federal Reserve's long term 2% in 2030.

So up until 2030, we might have inflation that is higher than 2%, which seems very reasonable because last year inflation has been about 2.8%.

And because we have all of this chaotic tariff situation in the economy, who knows what is the final inflation will be by the end of the year.

By the time that Trump is out of office, it is almost going to be 2030.

So maybe during the next President of the United States, inflation will actually come down to as low as 2%.

This is the data that suggests how big of a problem the US Debt has become.

The interest rates according to this report are going to stabilize around 3.5%.

But the yields on 10 year treasuries are going to stay high at 4.3%.

There is a chance or a projectory that they went, they might go as low as 4.1% this year.

But overall we are expecting them to rise back to 4.3%, even 4.4%.

And a big chunk of the US debt are 10 year treasuries.

And it's very important for the US government to have long term debt.

If you have short term debt, then you have to continuously refinance it.

But because interest rates on long term debt for the US Government are consistently rising, even the US Government right now is trying to refinance all of these long term debts into short term debts.

Because the government knows that investors don't have much confidence in the future of the United States and they're demanding much higher interest rate.

But when it comes to short term interest rates, yes, the government can actually borrow money at a much lower interest rate because in the short run risks are much lower.

If your friend is going to ask you to give him a loan of $10,000, if he is going to promise to give that money back next Week, you're not worried about it because next week is just seven days from now.

And chances of him going bankrupt within the next seven days are extremely low.

But if your friend gonna ask you that, can you please loan me money for the next 10 years?

Are you going to charge him a higher interest rate or a lower interest rate?

Of course you're gonna charge him a much higher interest rate because first of all, you don't know if that guy is gonna stay your friend for the next 10 years.

Chances of him of not returning that money are much higher.

Chances of him going broke and losing his job or getting sick is much higher.

So the risks are much higher, which means that you will demand a much higher interest rate.

That is how investors right now are approaching the US Government before they are buying U S Treasuries.

Just to show you how bad the situation is that by 2036 the public debt compared to the GDP is going to rise to 120%.

For comparison, during World War II, which was the greatest crisis in the history of mankind, and

the United States has played a vital role in that war, the total debt to GDP ratio, and

I mean the public debt, has reached 106%.

So the real question comes back is that how is it possible that during peace times, during the peak of the United States, during the AI revolution, during the Internet revolution, that the United States is borrowing far more money than it borrowed during the greatest crisis in the history of the United States?

Maybe the government is doing something wrong.

And it's probably because it is so unpopular today for any politician to come and say that we are going to raise taxes and we're going to cut spending.

Everybody wants the government to simply cut taxes on everybody.

I actually like when the government cuts taxes.

But sooner or later, if the government is going to go broke and the dollar is going to become worthless, then nobody will be able to do business.

So it's extremely important that the government is financially responsible and they keep the value of the dollar at least that the inflation is not going to rise more than 3%.

And when the government is borrowing money, you have to understand that sooner or later it is the citizens who are going to pay that debt.

Don't imagine for a moment that the government can simply borrow that money without ever paying that money back.

It's not entirely just the fault of Donald Trump that the United States has such a huge debt, because this debt problem has been spiraling out of control for the last 30 years.

But last year he passed the big beautiful bill.

And what it did is that it cut government's revenue and at the same time it increased spending.

So when you're spending more than you're earning, what do you think is going to happen in a year?

The US Government is making the exact same mistake that the average American used to make or the average person that would lead him to bankruptcy.

They start making some money, they have some certain quality of life.

But you don't want to downgrade from your quality of life because you simply got used to it.

So instead of cutting spending, you start borrowing money to maintain that lifestyle.

You can do that for some time, but sooner or later you have to pay that debt back.

So when that time comes in, what do you do?

But because the US Government is in a position to raise money when it needs, which means that the US Government will raise taxes, there is nothing worse than bankruptcy because you are going to lose your credibility.

No one else is going to loan you money and that will be basically the end of the dollar to be the global reserve currency.

So basically, in five to 10 years, we're looking in a situation where the US government will have to hike taxes, maybe by 50% or even double taxes on everyone else, just because the US Government or the United States has enjoyed low taxes for such a long time.

If the government is spending so much money, why isn't the life of the average American getting a lot better?

If the government would have borrowed that money and made your life so much better, you would perfectly understand that.

But guess where the government will spending most of that money?

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US Debt Crisis just got 10X WORSE

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