The U.S. national debt has skyrocketed to over $35 trillion for the first time in history, with around $12 trillion added since 2020. This equates to an average of $280 billion in federal debt being added monthly since January 2020, leading to around $105,000 in federal debt for every U.S. resident. Despite the alarming numbers, presidential candidates Kamala Harris and Donald Trump have not focused on addressing the nation’s massive deficits during their campaigns, suggesting that debts will continue to rise over the next four years. Projections indicate that federal debt could reach $46 trillion by 2028, creating a financial crisis that has yet to be adequately addressed.
The Congressional Budget Office forecasts that national debt could surpass $56 trillion by 2034, as government spending and interest costs continue to outpace tax revenue. Social Security and Medicare expenditures, along with high interest rates, make it challenging to reduce America’s debt burden. Michael Peterson, CEO of the Peter G. Peterson Foundation, emphasized the urgent need to acknowledge and address the growing debt issue, stating, “We can’t keep pretending this is not a problem.” With the upcoming election adding the possibility of another $1 trillion in debt, the need for a solution becomes even more pressing.
In light of the escalating national debt, some have suggested the idea of creating a strategic Bitcoin reserve to back the U.S. dollar. Both independent presidential candidate Robert F. Kennedy Jr. and Senator Cynthia Lummis have proposed such systems as a potential solution. Senator Lummis expressed that a strategic Bitcoin reserve could help alleviate the national debt burden and secure the financial future for generations to come. However, the practicality of using Bitcoin to reduce debts is uncertain, as liquidating large amounts of the asset could have significant implications for the cryptocurrency market and the economy as a whole.
Bitcoin adoption solutions firm JAN3 highlighted the disparity between the national debt figure and the total Bitcoin supply, indicating that a transition away from fiat currency may be on the horizon. They emphasized the growing need for a Bitcoin Strategic Reserve as the debt crisis continues to escalate. Despite the potential benefits of utilizing Bitcoin to address national debts, the process of liquidating the asset in large quantities poses potential risks and challenges for financial markets. As the debate on managing national debt and exploring alternative solutions continues, it remains essential to prioritize fiscal responsibility and long-term sustainability in addressing the nation’s financial challenges.
