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Profit Confidential (www.ProfitConfidential.com) an e-letter of Lombardi Publishing Corporation, a 27-year-old consumer publisher that has served over one million customers in 141 countries, cautions that focusing on the recently announced $680 billion deficit for fiscal 2013, the smallest in five years, is masking the record $17.0 trillion national debt. The newsletter also warns that the deficit is another stepping stone that could see the national debt double to $34.0 trillion.According to recently released data from the Treasury Department, the U.S. reported an annual deficit of $680 billion, its smallest amount since 2008. The $680 billion figure is 51% less than the record $1.4 trillion deficit reported in fiscal 2009.
“Should this be taken as good news? The mainstream media seems to think so, believing it is a result of strong improvements in the country’s fiscal picture. But the fact of the matter is, it’s just smoke and mirrors,” says lead contributor and financial expert Michael Lombardi. “No matter how you look at it, any budget deficit, big or small, is adding to a bigger problem at hand—our massive national debt.”
The U.S. national debt has increased significantly over the past few years. At the beginning of 2008, it stood at $9.2 trillion, and in mid-October, it crossed the $17.0 trillion threshold for the first time ever. In just a few short years, the national debt has increased almost 85%.
“I believe the national debt will double from here, from $17.0 trillion to $34.0 trillion,” Lombardi notes. “Why am I so negative on the national debt? I'm skeptical because I don't believe this year's numbers present the real story on government spending.”
In fiscal 2013, the U.S. government paid interest of $415.7 billion on the national debt, while the interest payments were $359.2 billion in fiscal 2012; this means the interest payment on the national debt has increased almost 16%. However, Lombardi observes, thanks to the Federal Reserve, interest rates are being kept artificially low. If the government was paying the interest rate it has historically paid on its debt over the past 30 years, the annual interest expense on the national debt itself would be over $1.0 trillion.
Lombardi also notes that student loan debt has surpassed $1.0 trillion and the true cost of Obamacare has yet to be really pinned down. Add an aging population that is more dependent on Social Security than ever before and unfunded liabilities and it becomes apparent that the U.S. is facing growing budget deficit problems going forward.
“If what I'm saying materializes even a bit, foreign creditors, who hold 40% of U.S. debt, could ask for their money back. Because America could never meet its obligation, the Federal Reserve would have to buy all new U.S. debt,” he says. “This is why I believe the national debt is something to be very worried about, and why reporting the smallest annual deficit in five years isn’t anything to celebrate.”
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation and Profit Confidential, visit www.lombardipublishing.com.
Contact Info:
Name: Wendy Potter
Email: Send Email
Organization: Lombardi Publishing Corporation
Address: 350 5th Avenue, 59th Floor, New York, NY 10118
Phone: 905 856 2022
Website: http://www.profitconfidential.com/
Release ID: 25536
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