Jan 20, 2021
The national debt level in the United States is an important topic that usually gets quite a bit of attention in the financial and economic news. However, with everything else that's going on in the world, it seems the conversation about the debt level has been getting less attention than it deserves. We dedicated today's episode to talking about the national debt level. Throughout the episode, Grant dives into where we are in the national debt cycle, how much debt we have, at what rate our national debt is growing, and long term economic consequences that might occur as a result of the growing national debt.
[01:29] Households Vs. Federal Government – Grant brings up an interesting comparison of the finances and debt of a typical household versus a federal government to explain how debt can be beneficial when planned wisely.
[05:44] Growing National Debt – What happens if the national debt keeps growing over a long time and what it means for investors and citizens.
[07:26] Current Level of National Debt – How much national debt we have right now and where the national debt level is relative to the GDP.
[10:00] History of National Debt – Grant reviews the levels of national debt we had over the last few decades relative to the GDP and some patterns that could be seen in world economies over centuries.
[13:04] Role of the US Treasury – Measures taken by the US Treasury to gain funds and how these measures contribute to the national debt.
[15:46] The Breaking Point – Grant shares his thoughts on at what point a country starts to run into problems with their national debt and what contributes to these problems.
[20:19] Options at the Breaking Point – What options a country is left with when they have too much national debt and the consequences associated with these options.
[25:07] The Current Trajectory – Where the USA is headed in terms of the national debt, how this forces the federal reserve to print more US dollars, and how it bears the risk of losing the US dollar's status as the world's reserve currency at some point.
[31:26] Investors and National Debt – What the growing national debt level means for investors, and what measures we can take to ensure the stability of our investments.
[36:29] Highlights – Grant recaps the situation related to the national debt and shares a few tips about diversifying your investments.
The Changing World Order by Ray Dalio: