The amount of total government debt outstanding on the US balance sheet is skyrocketing.
Recently updated figures from the government’s FiscalData platform show the country’s debt rose by $57.2 billion in just four days.
After surpassing the $32 trillion mark on June 16, the total debt accumulated by the United States has already jumped another $590 billion by July 20.
In a new interview on Bloomberg TV, billionaire investor David Rubenstein said the United States could only manage its ever-growing debt with inflation, which would further widen the income inequality gap in the United States.
“When I left the White House under President Carter, the total indebtedness of the United States was less than $1 trillion, or about $800 billion. Now it’s about $32 trillion. There’s no way out of that except basically inflating your exit. We’re not going to cut government spending. We’re going to raise taxes by that much. We’re not going to go for a bailout. But the IMF, that’s not realistic. And we’re not going to default. The only alternative is to inflate your output. So we’re going to inflate our output, and that’s not a good problem for low-income people in our society because they’re less and less able to handle inflation than wealthier people.
Rubenstein says America’s economic fundamentals are setting the stage for a growing clash between those with wealth and those without.
“The biggest concern overall is the conflict between the haves and the have-nots. In the western world, the clash is going to be between the old and the young. Old people are living longer and longer, but pension benefits aren’t really going to meet what they expect or need. And the younger people are going to have to say, ‘we don’t want to work harder just so you have a better retirement.’
So you’re going to have social security in the United States, for example, which won’t be funded enough. You’re going to have other staffing programs that aren’t adequately funded, and the result will be that more and more people are going to fight between different age groups, you might say. The haves who work hard and want to make more money for themselves and the have-nots, who want more money given to them for the retirement they need…
In the United States, we have seen income inequality increase over the past 10, 20, and 30 years. And that’s the opposite of what we should really have as a society. In the United States, many people no longer believe in the American dream, while people come to us, they often believe in the American dream. But people born in our country no longer think they can stand up because they have so many social factors against them. This will produce growing income inequality.
Rubenstein says the days of America’s global economic dominance are numbered and a new generation of leaders is needed in corporate America and in Congress to implement new ideas that guide the country’s future.
“I think the younger generations would be helpful if they got more, much more involved in government. We still see a lot of the senior government positions in the United States not filled by young people and I think younger, younger people would be good to get more involved in government, but also in business. In most of the board meetings that I attend and corporate board meetings or foundation board meetings or nonprofit board meetings, you rarely see anyone under 40 in those boards.
So more and more, I think we should involve 30s and 40s in these councils because they reflect the younger generation. And I think their concerns aren’t very often reflected in board meetings, corporate boards and foundation boards, nonprofit boards, and so on.
Maybe they could do a better job, maybe not, but they could reflect the youth perspective. I think young people would be able to come up with ideas that maybe older people like me can’t really think of either. And so, for example, when you talk about AI and you have a board meeting to talk about it, how many people really know about AI who are in their 60s or 70s? Probably not that much. The people who know a lot about AI are probably in their 20s and 30s, but you don’t really see them in board meetings when the AI discussion is happening…
Remember, the United States is not meant to rule the world for the rest of our lives, or for another hundred years. We have been the largest economy in the world since 1870. China and India are catching up with us now and will overtake us in a reasonable time in the future. So the United States, if we are not as wealthy as we have been compared to other countries, we will have an inferior way of life. So not only will the haves have an inferior lifestyle, but the have-nots will have an inferior lifestyle than they even have today. So that’s a reason why we need to grow the economy and make it a lot more efficient and effective, but also share the wealth a lot more than we are.
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