Youngins - Something to Think AboutI will use the US as an example but they are not alone.
This fiscal year, the US Government will spend about one trillion dollars in interest payments to service the National Debt. To put this number into perspective, about 20 years ago under the Bush Administration Total Government Expenditures were about 2 trillion. YEP - the current debt payments is about half of what was spent on everything a scant couple of decades ago.
According to the CBO, the US National Debt will increase by over 2 trillion a year over the next 9 years - that is about a 50% increase in the total debt. What's worse is that after that year, the US Social Security System will pay out more than it brings in and the same is true for Medicare.
So the increase in the debt will increase at a faster clip unless something is done.
Soooo...what can be done?
Well I suppose lots of things, but all of them involve some sort plan to increase taxes or reduce Government expenditure or some combo of both. None of that is good news for investors in the future
If nothing is done what then happens?
Easy - Inflation - the "hidden tax
Now...if you have rich parents then perhaps you don't need to worry. If not then you are facing some stiff challenges.
What is the implication of the previous sentence?
Greater income inequality...
What does that mean?
Take a gander of what is going on right now in Davos and you will get an idea.
Why did I say youngins in the title?
Well I think that is pretty obvious!!