Will U.S. National Debt Rise By $1T Every 100 Days, Turning Your Dollar Worthless?

U.S. national debt
U.S. national debt skyrockets by $1 trillion

LUCKNOW (CoinChapter.com) — The U.S. national debt has been spiraling at an alarming rate. It surpassed the $31 trillion mark in 2023, according to the Treasury Department’s figures. As the debt continues to climb, a burning question has emerged: Will the US government really print $1 trillion every 100 days to address this mounting crisis?

U.S. national debt chart. Source: FRED

US National Debt Has Soared $1T in Just 15 Weeks

Michael Hartnett, chief investment strategist at Bank of America, first questioned the U.S. national debt explosion.

“The U.S. national debt is rising by $1 trillion every 100 days,” he noted, adding that it’s “little wonder ‘debt debasement’ trades closing in on all-time highs.

Hartnett’s prediction seems rooted in the unprecedented pace at which the US debt has grown. The Treasury Department’s figures show that the national debt spiked by $1 trillion in just 15 weeks between September and January, reaching $34 trillion.

U.S. debt chart
U.S. national debt in the last 100 years. Source: Treasury Department

This rapid debt accumulation is due to the government’s ongoing deficit spending, which shows no signs of abating. In the fiscal year 2024, the federal budget deficit is projected to reach $1.5 trillion.

Budget projection U.S.
Budge projection for 2024. Source: Congressional Budget Office (CBO)

Unprecedented Debt Growth Causing Concern

While deficit spending is not something new, the sheer magnitude of the current U.S. national debt levels is causing concern. Joao Gomes, a finance professor at the Wharton School of Business, has warned that spiraling debt could plunge the country into a financial crisis as soon as next year, potentially “derailing the next administration.”

Joao Gomes's tweet on debt
Joao Gomes’s tweet about debt. Source: X

The primary concern is the growing interest payments on the national debt, which threaten to consume an ever-increasing portion of the government’s tax revenue. The Congressional Budget Office (CBO) projects that interest costs on the national debt will total $870 billion in 2024, nearly a quarter of the government’s tax receipts.

Renowned authors like Nassim Taleb have similar concerns, stating that the US economy is in a “death spiral” due to Congress’s continual debt limit extension. JPMorgan’s CEO Jamie Dimon has predicted that spiraling U.S. national debt could spark a global “rebellion.” Additionally, Bank of America’s CEO Brian Moynihan described the nation’s debt pile as the “most predictable crisis we’ve ever had.”

The Domino Effect of Printing Money

So, what could drive the US government to print $1 trillion every 100 days? One potential scenario is a severe economic downturn that necessitates massive stimulus measures. In such a situation, the Federal Reserve may be compelled to restart its quantitative easing program, effectively printing money to purchase government debt and inject liquidity into the economy.

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Another possibility is a prolonged period of stagnant economic growth, combined with Congress’s continued inability to rein in deficit spending. In this scenario, the government may monetize its debt by printing money to finance its growing expenditures.

U.S. dollar index weekly performance chart. Source: TradingView

However, such a move would likely have severe consequences, potentially leading to a collapse of the U.S. dollar. Legendary investor Jim Rogers has warned that the massive $34 trillion U.S. national debt means the looming recession will be “the worst in [his] lifetime” and that the Federal Reserve’s actions could ultimately lead to the collapse of the U.S. economy.

The prospect of the US government printing $1 trillion every 100 days may seem far-fetched. However, one should not underestimate the rapidly increasing debt levels and the potential for economic crisis.

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