In August 2020, the public debt of the United States was around $26.73 Trillion U.S. dollars, over $4.7 Trillion more than a year earlier, when it was around $22.02 Trillion U.S. dollars.
Anytime and every time the government gives away money, the rich get richer… and the poor barely survive. Later, the middle class of the future gets stuck with the debt they can never repay.
Anytime the government encourages people to borrow money of sends out free money… the consequences are the same… MORE DEBT. Examples:
Home Loans—Waves of home loans were given out to people who could not afford the homes they were buying, who could not repay the loans, which created the Subprime Mortgage Crisis, then home values fell 20%, the Stock Market crashed, unemployment soared etc.
College Debt—In an era of college educations costing $50,000 to $60,000…a year… students went into debt, came out of college with a degree, debt of more more than $37,000, got a job that could not pay enough to support a decent lifestyle and repay the debt.
Student loan debt in 2020 is now $1.56 trillion in the United States, with borrowers on average owing $37,172 in debt. Student loan debt is the second largest class of consumer debt, behind mortgage debt.
Government COVID Giveaways—Not one to look a gift horse in the mouth, I thank Washington for the $1,200 they sent me and $1,200 sent to my wife. Since we’re trapped at home this year, we can’t go anywhere to spend the money… no Walmart trips, no luxury cruises, can’t eat at a restaurant, can’t go to Europe, much less fly in an airplane. (By God’s Grace, we also realize how little two people on Social Security really need to survive and be happy.) Unfortunately, the government’s ineffectual plan to get me to spend money they gave me has failed.
Fake Money—So the U.S. Government created a huge pile of newly printed money, sent it out to Americans to spend quickly. But a funny thing happened on the way to the mall. The US net private saving rate in 2020 will now be the highest since World War II. The economic significance of this large amount of savings is unclear.
The government wants and needs you to borrow money— and spend it, but that is not going according to plan. Private savings projections are soaring.

The Law of Unintended Consequences
So the guys in Washington sent out a Trillion Dollars, or so, to get the economy moving during COVID. The end result, millions of those checks were deposited into savings accounts or rushed into brokerage accounts to buy Stocks. Is it any wonder why Stocks have rebounded to all-time highs?
But have we really taken care of needy families? Federal Reserve Chair Jerome Powell reported in February among those working in households making less than $40,000 a year, almost 40 percent had lost a job in March.
The government forced businesses to close, shutdown the economy, but no worry, Washington sent out checks another million people continue to be standing in line each week, newly unemployed, because businesses they worked for have disappeared. The solution— Washington says print more U.S. Dollars and hand them out. No one seems worried about the National Debt. That begs the question, “Is our nation running on borrowed money and borrowed time.”
The US Congressional Budget Office (CBO) now projects a $3.7 trillion increase in the federal budget deficit in 2020 and 2021 combined. We’ve seen numbers much higher, but creating another $3.7 trillion dollars out of thin air is frightening enough. If you’re really interested in debt, check out the National Debt website for an eye-opening experience.
The Government Wins, the People Lose
I’ll guarantee you one thing— no matter who wins in November, Republican or Democrat, you can expect more government interference in the free markets, bigger government, more subsidies, and massive waves of additional money-printing in 2021.
Republicans are no longer concerned with cutting the size of government. Trump has delivered the biggest bundle of freebies to the American people in history – the “greatest national mobilization since World War II.”
We won’t even guess how much a Democratic-led government would spend if they were elected. In any scenario we can imagine, the government will spend more, the American people will produce less, debt will explode, and the country become more fragile as a result.
As always, the rich get richer… and the poor barely survive, we hope. Later the middle class will get stuck with the billS. Sadly, our children and grandchildren will get stuck with a big pile of social unrest, government problems and debt they can never repay. Ben Franklin was ever so right when he said, “Neither a borrower or lender be.”