Economic data shows that a growing shar of Americans’ income tax is being devoured by the interest payments from the country’s ballooning national debt, which according to online trackers is now close to the $35 trillion mark.
As Heritage economist E.J. Antoni pointed out on the microblogging platform X (formerly known as Twitter), interest payments on the country’s federal debt now consume a staggering 76% of all personal income taxes collected after exploding 33% in a year.
This means that for every dollar Americans remit to the Internal Revenue Service, nearly eight dimes are diverted to service interest payments on the country’s debt after the cost of carrying the national debt skyrocketed by a third in just one year.
The Treasury Department expects to shell out more than $1.14 trillion in interest payments alone this fiscal year, a figure eclipses even the combined outlays for health and human services and Social Security, traditionally the government’s largest expenditures.
Notably, Paul Dietrich, the chief investment strategist at B. Riley Wealth Management, recently painted a concerning picture of the stock market, suggesting a potential decline far exceeding those seen in the early 2000s and 2008 and potentially the worst one Wall Street has seen over the past century.
The strategist predicted that the Federal Reserve will be forced to keep rates high to combat inflation, and the government will need to raise taxes to address its deficit. These factors, combined with a potential slowdown, could trigger a recession.
While a typical recession might see the S&P 500 decline by around 36%, Dietrich warned of a steeper drop, potentially as much as 48% to around 2,800 points which would bring the index back to levels not seen since the early days of the Covid-19 pandemic.
Meanwhile Robert Kiyosaki, the highly successful author of the “Rich Dad Poor Dad” series of personal finance books, has recently suggested the flagship cryptocurrency Bitcoin will along with gold and silver, see its price rise “when Trump becomes President again.”
Featured image via Unsplash.
