ClearValue Tax (Uncut) 01-06-2025
The US government’s debt crisis is getting worse in 2025 much worse I want to show you what is concerning for this year so first I want to bring up to speed the US government is in debts over $36 trillion as of today so how did this happen how did they get so deep into debts honestly it’s very straightforward the federal government simply spends more money than they bring in and they borrow money to make up the difference now here’s a chart of how much money the federal government has been borrowing
each year so this chart goes back to the year 2000 in 2022 they had to borrow 1.38 trillion do in 2023 they had to borrow 1.69 trillion in 2024 they had to borrow 1.86 trillion so all this borrowing has been adding up and that’s how we got here to where we are today and as you can see judging by the annual deficits the trend is not looking good the government spending problem has just been getting worse and what’s really screwed up I mean you got to think about this is that this is how much money that
they’ve been borrowing recently despite a low unemployment rate of nearly 4% and a strong GDP just imagine how bad the deficits will get if unemployment Rises or if a recession happens which would cause tax collections to decrease now I want to show you this and I think that you’re going to be disappointed I don’t I don’t think you’re going to be surprised I think you’ll be disappointed okay so when I say 2025 for you and me when we say 2025 that starts January 1st of 2025 and ends December 31st to 2025
right so that’s a calendar year the government does not operate on a calendar year they run on a fiscal year their 2025 starts well it started on October 1st of 2024 and ends September 30th of 2025 therefore for the governments they’ve already started their 2025 they’re 3 months deep into their 2025 and they’re off to a very bad start I want to show you the government has already overspent and are at a deficit of $624 billion in their first two months of 2025 so take a look at what it says the United States borrowed $624 billion in
their first two months of fiscal year 2025 including 367 billion in November so those are stats from the treasury departments so I’ll say yikes let me know if you’re disappointed yet and just to give you some context in fiscal year of 2024 for the first 2 months the deficit was $448 billion this year they did 624 billion so the governments out they outdid themselves this year however for this year the government is projecting a similar deficit to last year the Congressional budget office projected a $1.9 trillion deficit for
this fiscal year similar to fiscal year 2024 okay so the government you know they got some explaining to do as to why they’re off to such a bad start and here are some of the reasons why year-over-year tax collections have decreased by 7% government spending has increased by 18% this included higher spending on interest payments Social Security Medicare Medicaid the EPA VA and tax credits but if you think about it what can the government really do I’m not saying that innocent or blameless it’s not their fault I’m not saying that but
I’m just telling you the reality of the situation like what is the government going to do they can’t cut they can’t choose to cut interest expense they can’t I mean are they really going to cut Social Security Medicare Medicaid and you tell me so all I’m saying is that this is a bad situation okay so that’s one issue but I want to bring up another big concern okay so when the federal government needs to borrow money how do they do that what they do is they sell treasury Securities so you can think of those as
IUS okay so for those IUS those treasury Securities you know whoever buys them the federal government needs to pay them interest otherwise nobody’s going to lend money to the US governments okay so I want you to think about this the US government this year is going to overspend by about $2 trillion right so that means that they’re going to have to sell $2 trillion do worth of treasuries to finance the deficit okay but you have to remember well I don’t know if you knew but there’s 3 trillion of treasuries that are maturing this year
in 2025 so on top of the 2 trillion that they’re going to need to sell they’re going to need an additional three trillion so 5 trillion in treasuries total that they’re going to have to sell so the concerning question is who’s going to lend all this money to the US government who’s going to do all the buying of all these treasuries the problem is if there aren’t enough buyers of us treasuries then you know what’s going to happen the interest rate on government debt is going to go up to attract a sufficient amount of buyers so
the Europeans bought up an approximate net 300 billion of us treasuries last year so that’s the red line so what is their appetite going to be this year to buy up more treasuries the blue line is China they’re done lending money to the US government as you can see this chart it goes back to 2012 they’ve been cutting back on their us treasuries for the past few years and here here are some of the biggest holders of the public US national debt so US Treasury Holdings foreign holders 8.67 trillion
us mutual funds 5 trillion Federal Reserve 4.3 trillion us individuals 3.1 trillion us commercial Banks 1.7 trillion us private Pension funds 1.1 trillion us insurance companies only 630 billion essentially the big question is who’s going to absorb this increased supply of treasuries in 2025 and you have to remember that the Federal Reserve has not been buying and they’re trying not to buy more for as long as they can hold out so again that’s the problem if there are not enough buyers then interest rates on
treasuries will have to go up to attract more buyers but if interest rates on government debt goes up then that means interest rates on mortgages car loans student loans credit card that business loans are either going to stay high or go up even higher that’s the problem now if that happens and we’re in a higher interest rate environment just think about that a higher interest rate environment that unemployment you know creeps up the economy degrades and when those things happen the US government
collects less tax revenues and then in that situation the deficits increase and then the government has to borrow even more money and it’s just it’s just a bad cycle things get worse so listen I’ll tell you this that’s why I’ve been saying this whole time the government cannot afford this to happen so if they cannot find enough buyers of us treasuries you know what’s going to happen there’s no other way the Federal Reserve is going to get involved and the Federal Reserve will start buying up treasuries with money that they print
out of thin air and you know that’s going to cause it’s going to cause inflation to re accelerate and re accelerate hard so listen I’m telling you right now that the situation that we’re in it’s just so much more fragile Than People realize the government is truly stuck between a rock and a hard place but I’ll tell you this if the government has to choose between more inflation and a recession they’re going to choose more inflation so that’s why I’m telling people that if the stock market goes down or if the economy
degrades it’s just going to be short term it’ll be very short term because it’ll be a v-shaped recovery because the Federal Reserve is going to step in they’re going to come to the rescue but at the expense of more inflation but listen I’m not saying that we’re going to have doomsday or Armageddon in 2025 that’s not going to happen not 2 what I’m saying is that things are gradually and incrementally going to get worse like the boiling frog so I’m going to still stick to my prediction that inflation comes back
hard you know full force in 2026 of course we’re going to see it come back in 2025 but full force 2026 that is my expectation so listen I just told you the Troubles of 2025 if you want a longer term picture of what’s going to happen to the United States of America you know financially economically I encourage you to watch my great melt-up series because things are unraveling as expected you know I I think that a lot of people are not surprised now the last thing I want to say is that Trump really
has his work cut out for him when he gets into office on January 20th I know that a lot of people have faith in Doge to cut expenses to balance the government budget but again there are a lot of people that have no faith in Trump and think that he’s going to make the situation worse but please let me know what you think I look forward to reading your comments Please Subscribe I thank you for the support wish you a very nice day take care here
