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FedEx Founder Sounds the Alarm on 'Unsustainable' National Debt Levels

In a Fox News interview, FedEx Founder Mr. Smith expressed grave concerns about the U.S. national debt, which is projected to reach new heights relative to GDP in the coming decades according to the Congressional Budget Office (CBO). Echoing the sentiments of financial leaders like JPMorgan CEO Jamie Dimon and investor Ken Griffin, Smith warns that the current trajectory of government spending is unsustainable. He highlighted the risk of the U.S. dollar losing its reserve currency status, particularly due to efforts by countries like those in the BRICs alliance. This loss could severely impact the American standard of living.

Smith doubts the current political leadership's ability to prevent a fiscal crisis, countering Treasury Secretary Janet Yellen's stance that the U.S. doesn't need to balance the budget for fiscal sustainability. With the national debt surpassing $34 trillion and interest payments exceeding $1 trillion annually, concerns are intensifying.

The House Budget Committee has moved to create a commission to recommend fiscal policy changes, acknowledging the bipartisan role in fiscal irresponsibility. Experts from the University of Pennsylvania warn that the U.S. has about 20 years to address the debt issue before it becomes an irreversible crisis that could lead to a government default with severe domestic and global economic repercussions. Read More.

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Deficits Set to Propel Public Debt to Unprecedented Highs Within Four Years

The Congressional Budget Office (CBO) has released its budget and economic outlook for the period 2024 to 2034, projecting that the U.S. national debt will soon exceed the size of the economy and set a new record in four years. Public debt is expected to grow from $27.9 trillion in 2024 to $48.3 trillion in 2034, with debt-to-GDP ratio rising to 116% in 2034, surpassing the historical peak of 106% set in 1946 post-World War II.

The growth in national debt is attributed to increased mandatory spending on entitlement programs like Social Security and Medicare, as well as rising interest costs on the debt. By 2034, mandatory spending is estimated to reach $6.3 trillion, with Medicare and Social Security expenses significantly contributing to this increase. CBO Director Phillip Swagel emphasized that net interest costs and underlying trends like population aging and rising federal healthcare costs per beneficiary are also driving up deficits.

The CBO's projections highlight the urgent need for policymakers to address the major drivers of the deficit to prevent the national debt from spiraling out of control. Read Now.