Feds Need 14% Tax Increase

Feds Must Raise Taxes 14% to Avoid $40 Trillion Debt Disaster, By Damon Geller

Decades of reckless government spending and Fed money-printing are reaching the breaking point.  According to new calculations by the Committee for a Responsible Federal Budget, the U.S. debt will more than double in the next 20 years – to a staggering $40 trillion!  So by the time today’s newborns enter college, the amount of debt held by the United States government will equal the entire U.S. economy!  And since this debt level is utterly unsustainable, the Feds must raise taxes a whopping 14% on every citizen in order to return to historical debt levels.  Regardless of whether they spike taxes or drown us in debt, you have only one option to keep your savings & retirement from vanishing.

The Road to National Insolvency - Driven by higher interest costs, Social Security and Medicare for baby boomers, as well as tax cuts in 2012, the federal debt held by the public is expected to hit $40 trillion in 2035, according to calculations by the Committee for a Responsible Federal Budget, which were based on Congressional Budget Office estimates.  This estimate is a staggering $7 trillion higher than the forecast in 2009 when Obama took office.  The debt is on pace to match the previous record, set in 1946, of 106 percent of gross domestic product.  In other words, our debt will be bigger than our entire economy!

The simple fact is, our economy isn’t growing fast enough to keep pace with the costs of caring for the soaring ranks of the elderly.  Plus, the discrepancy between spending and revenue is estimated to widen in the next few decades due to reckless government spending and the Fed’s easy money policy.  What does the government plan to do about this looming debt disaster?  Well, in truth, they have no plan.  All government estimates show that debt and spending will continue to increase – regardless of which party controls the White House or Congress!

Since we know they’re never going to cut spending, the only option is to raise taxes.  How much?  Brace yourself.  In order to bring the debt levels in line with the historical percentage of GDP, the Feds must raise taxes by 14% on every taxpayer in the nation!  And if you think the next election is going to change our course, think again.  All government debt & spending projections have been made regardless of which party controls our government!  Changes in party power never result in meaningful changes in economic policy.

Debt Has Doomed the Nation & the Dollar

In January of 2001, when Bush took office and Republicans controlled the Congress, the national debt stood at $5.7 trillion. Within 8 years, the national debt had ballooned to around $11 trillion – a doubling of U.S. debt in 8 years! Obama came into office in 2009 promising hope and change. But did he really change anything in terms of our debilitating national debt? Absolutely not. At the command of the Federal Reserve, our national debt will skyrocket to around $25 trillion by the time Obama leaves office. In short, the Fed will have increased the national debt 5 times in the span of two presidencies — regardless of which party was in power! The chart below shows the dramatic rise in U.S. debt since 2001: (From $5 trillion in 2001 to $18 trillion in 2015)

Everyone knows you can’t stockpile $25 trillion in debt without serious consequences. What serious consequences? The chart below shows the alarming loss in value of the U.S. dollar versus other currencies since 2001: (From 1.20 in 2001 to .80 in 2014). As you can see, the U.S. Dollar lost 33% of its value versus other currencies since 2001!

Debt Has Skyrocketed Gold

As the Federal Reserve drove up debt to record numbers, what happened to gold?  The chart below shows the tremendous increase in gold’s value since 2001:  (Gold went from $260 / ounce in 2001 to $1350 / ounce in 2012 to $1250 / ounce in 2015).

As you can see, gold increased over 5 TIMES in value since 2001! And this is including gold’s correction in 2013. So not only has gold increased 5 times since 2001, it’s once again a great value at these levels.

Where Are We Headed?

The U.S. Treasury tells us that the U.S. debt will reach $28 trillion by 2018, regardless of which party takes power in November or who wins the presidency in 2016! That’s a staggering 58% increase in U.S. debt from where we are today. Why will this happen? Because neither party has shown any serious commitment whatsoever to reduce government spending. And this will only result in further destruction of the U.S. dollar until the dollar finally collapses and ceases to be the world’s reserve currency, just as ALL global currencies have failed throughout history.

And based upon Treasury’s debt projections, here is where gold could be heading:

2015 US Debt = 21T | Gold = $1,640/oz.
2016 US Debt = 22.7T | Gold = $2,210/oz.
2017 US Debt = 25.5T | Gold = $2,560/oz.
2018 US Debt = 28T | Gold = $3,000/oz.

As the Fed rockets us to $28 trillion in debt, these projections put gold at nearly $3000/oz. by 2018!

Rescue Your Savings & Retirement

We will be at $28 trillion in debt by 2018 according to the U.S. Treasury. And if we don’t change course, we will hit $40 trillion in debt by the time today’s infants enter college.  The Fed will keep printing money and rates will stay in the basement for as far as far the eye can see thanks to our massive debt and the need to service it. The writing is on the wall. Upcoming elections will have zero impact on the current trajectory of the price of gold, as gold is moving much higher as the debt skyrockets. Gold is math and mathematics is a science. Politics is not. So if you want a new party in government, vote. But if you want to protect your savings & retirement, buy gold & silver.

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