Profit Confidential predicts that the U.S. national debt will top $34.0 trillion by fiscal year 2024.
New York, NY,, United States - - October 2, 2014 —
Profit Confidential (www.ProfitConfidential.com), an e-letter published by Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is announcing that its forecasts suggest the U.S. national debt will top $34.0 trillion by fiscal year 2024.
For the U.S. federal government’s fiscal year, which ended September 30, 2014, the Congressional Budget Office (CBO) predicts a budget deficit of $506 billion; down from $680 billion in fiscal 2013. But, just because the country’s annual deficit is declining doesn’t mean the national debt is rising by an equal amount. (Source: Congressional Budget Office, “An Update to the Budget and Economic Outlook: 2014 to 2024.”)
“In fact, between September 20, 2013 and September 20, 2014, the U.S. national debt increased by $1.0 trillion. And the U.S. government is expected to post budget deficits until at least 2024,” says economist and lead contributor Michael Lombardi. “According to the CBO, the U.S. government’s budget deficits will amount to $7.19 trillion between 2015 and 2024. That’s roughly $780 billion a year on average.”
Lombardi explains that each year the U.S. government incurs a budget deficit, it has to borrow money to pay for its expenses—and, as a result, the national debt increases.
With the national debt now at $17.7 trillion, adding another $7.19 trillion takes the total to $24.89 trillion by 2024. But government debt is rising at a much faster pace than national debt. It is quite possible then that the U.S. national debt will be at least $34.0 trillion within 10 years, according to Lombardi.
For fiscal 2014 (ended September 30), the U.S. government is estimated to pay $430 billion in interest on the national debt. The Federal Reserve has stated that it plans to raise interest rates starting in 2015 and will continue to do so right through to 2017. The CBO predicts interest payments on government debt will triple within 10 years.
“Traders are enjoying the recent rally in the U.S. dollar but that rally is being fuelled by the Federal Reserve’s repeated announcements of impending higher rates and the continued economic problems in the eurozone,” Lombardi adds. “The reality of the matter is that the projected massive increase in the U.S. national debt will have a material impact on the U.S. dollar.”
“Over the past five years, central banks around the world have reduced the amount of U.S. dollars they hold as their reserve currency. The greater a country’s national debt, the more pressure there is on its currency. The U.S. will be no different,” Lombardi concludes. “The long-term fundamentals for the greenback are poor. Exposure to investments in strong foreign countries, such as Canada, is very important for American investors at this juncture.”
For more information on Profit Confidential, visit www.ProfitConfidential.com.
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.LombardiPublishing.com.
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