Government expenditures, a euphemism for public spending, have surged alarmingly. In just two years, this spending has skyrocketed by 20%. Such increases contribute to rising national debt, inflation, and interest rates. The resulting economic environment threatens to crowd out private investment, leaving businesses struggling to secure funding.
Spending now comprises 10% of GDP, raising red flags about our economic future. This dependency on government funding restricts fiscal flexibility, meaning there’s less room for maneuvering when it comes to future budgets and spending. When government expenditures dominate the economy, it cultivates an unhealthy reliance that could stifle innovation and growth.
In the third quarter of 2024, GDP growth fell short of expectations. The numbers paint a troubling picture: the economy has been propped up mainly by government support rather than robust private sector performance. When growth relies heavily on government interventions, it signals a weakness in the underlying economy.
The fiscal 2024 deficit has exceeded a staggering $1.8 trillion. As this deficit looms, the Federal Reserve and Treasury plan to cover the shortfall by resorting to inflation, which effectively erodes the value of money over time. While the interest on this mounting debt is poised to explode, the real (inflation-adjusted) value will not rise as quickly, leading to a projected $1 trillion difference by the end of 2030.
Gold has reached an unprecedented milestone, hitting $2,800 per ounce for the first time in history. This surge often reflects growing uncertainty in financial markets, with investors turning to gold as a safe haven amidst turbulent economic conditions.
The time to demand a balanced approach to government spending is now—before it’s too late.
Sources
- St. Louis Fed
- MIT Sloan
- Business Insider
- Cato Institute
- U.S. Bureau of Economic Analysis (BEA) – GDP Report
- Federal Reserve Bank of Atlanta – GDPNow Model
- Bureau of Labor Statistics – Job Openings and Labor Turnover Survey (JOLTS) Report
- U.S. News – Job Openings Fell in September to a 3 1/2-Year Low
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