National Debt Default Authorized by the U.S. Treasury in August
Talkin' 'Bout that Dough: US Faces Potential Debt Crisis
Last month's tax reports hinted at a wallet-busting situation for the old U.S. of A, with a probable exhaustion of federal funds by August when Congress takes a well-deserved break. Enter Scott Bessent, pleading with Congress to boost or suspend the debt ceiling by mid-July, to protect the U.S.'s sterling reputation and credibility.
Indeed, waiting until the final moments to up the debt limit can spell some serious financial drama for financial markets, businesses, and the federal government. It also has the knack for tanking business and consumer confidence and sending borrowing costs for the taxpayers through the roof.
Feeling the burn, the U.S. Treasury recently announced that the nation's debt hit a record-breaking $36.2 trillion on May 8. That's right, folks, the good ol' U.S. milestoned its way past the $36 trillion mark for the first time, ever, in U.S. history. Can you believe it? Back in 2024, during his presidential campaign, Donald Trump touted his plans to lower the national deficit. Among those plans were the sale of "golden visas" and funds from so-called "reciprocal" tariffs to pay off the debt.
Here's a fun fact: According to the Bipartisan Policy Center, a U.S. debt debtacle might just go down between mid-July and early October 2025 if Congress keeps neglecting the situation. Be on the lookout for disaster relief spending, the pace of tax revenue in 2024, and additional government revenue from those Trump tariffs, analysts warn.
Now, let's delve a bit deeper into Donald Trump's proposed methodology for tackling the national debt during his crack at the presidency in 2024. His plan centered on slashing nondefense domestic spending, restructuring federal agencies for increased efficiency and elimination of unnecessary costs, and enacting significant tax cuts to fuel economic growth and swell Americans' bank accounts.
In other words, Trump wanted to drastically reduce the teaching budget by eliminating loan and grant programs, for example. He also planned wicked aggressive spending cuts across the board, including a freeze on subsidies, grants, and other assistance programs. And, of course, he dreamt of a tax overhaul that would cement the 2017 Tax Cuts and Jobs Act, permanently slashing corporate taxes and implementing more tax breaks for everyone. He swore this grand plan would pump an extra $5,000 into the pockets of every American and bolster economic growth beyond belief.
As ambitious as those ideas might have been, many experts cautioned that Trump's plan might actually make the debt crisis worse in the short to medium term. Remember, nothing's a sure thing in this wild world of ours, folks!
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- mood: gossipy*
Business leaders and political analysts are closely monitoring the debt crisis in the United States, as the country faces potential economic instability if the debt ceiling is not raised by mid-July. The National Debt, currently at a record-breaking $36.2 trillion, has become a point of concern for both financial markets and businesses.
During his 2024 presidential campaign, Donald Trump outlined his plans to address the national debt, which included aggressive spending cuts and significant tax cuts to fuel economic growth. However, experts warn that these policies might actually exacerbate the debt crisis in the short to medium term, and the long-term economic impact remains uncertain.
