The United States has hit a new record in its national debt, now exceeding $35 trillion for the first time. This significant increase reflects a deepening fiscal challenge, with the country accruing around $12 trillion in federal debt since 2020. On average, the U.S. has been adding $280 billion in debt each month since January 2020.
This enormous debt amounts to roughly $105,000 for every American, prompting concerns about the country’s financial future. As the Kobeissi Letter pointed out, “How can this possibly end well?”
Escalating National Debt
Despite the rapid rise in national debt, presidential candidates Kamala Harris and Donald Trump have largely avoided addressing the issue during their campaigns, indicating that the debt could continue to grow in the coming years. Projections from usdebtclock.org estimate that federal debt will hit $46 trillion by 2028. The Kobeissi Letter observed that calls for spending cuts are frequently ignored and that the debt ceiling crisis has been merely postponed, not resolved.
The Congressional Budget Office forecasts that national debt will surpass $56 trillion by 2034, driven by increased spending and interest expenses outpacing tax revenues. High expenditures on Social Security and Medicare, combined with persistent high interest rates, make it difficult to reduce the debt. Michael Peterson, CEO of the Peter G. Peterson Foundation, which advocates for fiscal responsibility, told the New York Times, “We can’t keep pretending this is not a problem.” He noted that with the election approaching, the country is expected to add another $1 trillion in debt in the near term.
Is Bitcoin the Solution?
There has been considerable discussion about using a strategic Bitcoin reserve to support the US dollar. Independent presidential candidate Robert F. Kennedy Jr. and Senator Cynthia Lummis have recently proposed such measures. On July 30, Senator Lummis suggested that a Bitcoin reserve could help manage the growing national debt and secure the financial future for future generations.
Bitcoin adoption firm JAN3 underscored the gravity of the debt situation, noting that the national debt is 1.6 million times greater than the total supply of Bitcoin. They stated, “The end of fiat is imminent,” and stressed the increasing need for a Bitcoin Strategic Reserve.
However, implementing Bitcoin to manage national debt presents challenges. Selling Bitcoin to reduce debt might cause market disruptions, as seen with recent government sales of the digital asset impacting the crypto markets.
