The amount of total outstanding public debt on America’s balance sheet is soaring.
Newly updated numbers from the government’s FiscalData platform show the country’s debt has surged by $57.2 billion in just four days.
After surpassing the $32 trillion mark on June 16th, the total debt accumulated by the US has already jumped an additional $590 billion as of July 20th.
In a new interview on Bloomberg TV, billionaire investor David Rubenstein says the US can only manage its ever-increasing pile of debt with inflation, which will further expand America’s income inequality gap.
“When I left the White House under President Carter, the total indebtedness of the United States was under $1 trillion or roughly $800 billion. Now it’s roughly $32 trillion. There is no way out of that except essentially inflating your way out. We aren’t going to cut expenses in the government. We are going to increase tax that much. We aren’t going to go to a bailout. But the IMF, that’s not realistic. And we’re not going to default. The only alternative is to inflate your way out. So we’re going to inflate our way out, and that’s not a good problem for people at the lower income parts of our society as they deal increasingly less well with inflation than wealthier people do.
Rubenstein says America’s economic fundamentals are setting the stage for a mounting clash between those who have wealth and those who don’t.
“The biggest concern overall is that the clash between the haves and the have nots. In the Western world, the clash is going to be between the older people and the younger people. The older people are living longer and longer, but the retirement benefits are not really going to keep up with what they expect or what they need. And the younger people are going to have to say, ‘we don’t want to work that much harder just so you have a better retirement.’
So you’re going to have Social Security in the United States, for example, not being adequately funded. You’re going to have other endowment programs that are not adequately funded, and the result is going to be more and more people are going to be fighting between a clash of age groups, you could say. The haves who are working hard and want to make more money for themselves and the have nots, who want more money to be given to them for the retirement purposes that they need…
In the United States, we’ve seen income inequality increasing over the last ten, 20 and 30 years. And that’s the opposite of what we really should have as a society. In the United States, many people don’t go any longer believe in the American dream, whereas people come to our country, they often believe in the American dream. But people born in our country don’t think any longer they can rise up because they have so many social factors against them. That’s going to produce an increasing income inequality.”
Rubenstein says the days of America’s global economic dominance are numbered, and a new generation of leaders is needed across American businesses and in Congress to implement fresh ideas that drive the country’s future.
“I think younger generations would be helpful if they got involved in the government more, much more. We still see a lot of the senior government position in the US not occupied by younger people and I think younger, more younger people would be good to get involved in government more, 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 somebody under the age of 40 on these boards.
So increasingly, I think we should get people in their thirties and forties on these boards because they reflect the younger generation. And I think their concerns are not reflected very often in board meetings, corporate boards and foundation boards, nonprofit boards and so forth.
Maybe they could do a better job, maybe not, but they could reflect the views of younger people. I think younger people would be able to provide ideas that maybe older people like me can’t really think of as well. And so, for example, when you talk about AI and you have a board meeting talking about AI, how many people really know AI who are in their 60’s or 70’s? Probably not that much. The people that know much about are probably in their twenties and thirties, but you don’t really see them in board meetings as much when the discussion of AI is occurring…
Remember, the United States isn’t destined to lead the world the rest of our lives, or for another hundred years or so. We’ve been the largest economy in the world since 1870. China and India are now catching up and will pass us in some reasonable period of time in the future. So the United States, if we’re not as wealthy as we have been relative to other countries, we will have a lower lifestyle. So not only the haves have a lower lifestyle, but the have nots will have a lower lifestyle than they even have today. So that’s a reason why we need to grow the economy and then make it much more effective and efficient, but also share the wealth much more than we are.”
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