U.S. National Debt to Hit $19.0 Trillion This Year?
According to the estimates by the Congressional Budget Office (CBO) for the fiscal 2015 year that began in October of 2014, the U.S. government will report a budget deficit of $468 billion. (Source: Congressional Budget Office, last accessed April 30, 2015.)
Of course, this won’t hold true.
That’s because, as of March 31, just six months into its fiscal year, the U.S. government has already racked up a budget deficit of $439 billion. (Source: U.S. Department of the Treasury, last accessed April 30, 2015.)
Based on what’s already happened in the first six months of the government’s current fiscal year, our budget deficit this year will be closer to $1.0 trillion than to the CBO’s estimate of $468 billion.
Newsflash: Student Debt Defaults Coming
While the government’s overspending is one factor that will send public debt soaring, there are other factors that can accelerate this process. Over the past few years, the U.S. federal government has become a major player in the student loan market…and problems are brewing there.
In the last quarter of 2014, student loans in the U.S. amounted to $1.16 trillion. And the default rates on these loans are on the rise. In the first quarter of 2015, 11.3% of all loans were 90+ days delinquent or in outright default!
Recently, I heard that a for-profit college, Corinthian Colleges Inc., abruptly shut down its 28 campuses that served over 16,000 students. It has reached an agreement with the Department of Education to have federal student loans forgiven if students so request. This instance alone can cost taxpayers over $200 million. (Source: Bloomberg, April 28, 2015.)
What’s stopping other for-profit colleges from shutting down their business and getting the government to forgive the student loans? Despite soaring defaults on student loans, the government has yet to formally write off any student loans on its books.
Don’t Rule Out $34.0-Trillion Public Debt
Not enough attention is being paid to the national debt problem today. In fact, I don’t think the majority of Americans care. At the pace the U.S. government is currently spending, with the student loans fiasco, interest rates set to rise, and no real national disaster expense in the budget, the $34.0 trillion in public debt I’ve been saying we’ll be seeing will happen even sooner than originally anticipated.
Consistent with my recent writings, accelerated inflation caused by central bank paper money printing, coupled with accelerated government debt, will not bode well for the U.S. dollar in the long run, but will be a blessing for gold bullion prices.