The expectation is that the US public debt will go through the roof in the next ten years. Currently, this number stands at about $31.5 trillion. However, it is expected to exceed $51.9 trillion in ten years.
Total household debt is also at a historic high of $17.05 trillion.
Consumers accumulate debt
The reason for the massive increase in consumer debt is that many people refinanced their mortgages during COVID-19. There were a total of 14 million units, all of which wanted to take advantage of the low interest rates during the pandemic.
As of the fourth quarter of 2019, mortgages are responsible for 86 percent of the increase in US consumer debt. Credit card debt is responsible for 8 percent of the increase, followed by student loans.
Furthermore, Statista says that the public debt of America will rise to $ 51.99 trillion in 2033. At the current interest rate of about 5 percent, that would result in interest costs of about $ 2.6 trillion.
By comparison, the U.S. government pays about $800 billion annually for the entire military. In that respect, such interest costs would be a tragedy for the US government.
Cautious estimate
What you may not know is that these estimates are often quite conservative and prudent. In practice, we often see that the debt rises much faster than expected. This is mainly because it is so difficult to include unexpected things in those predictions.
We all didn’t see COVID-19 coming either and government debts worldwide went through the roof during that period. In that respect, the coming years could be disastrous for the US dollar.
That is something that would be a good thing for Bitcoin. If US government debt goes through the roof, it is quite possible that there will be another flight to scarcity. In that case, the absolute scarcity of 21 million units of Bitcoin could be very attractive.