The US borrows $827,887,738,000 in three months as a trillion-dollar asset manager warns debt spiral threatens Americans' prosperity and security

The US national debt has risen over $800 billion in three months after a fiscal warning from a major asset manager.

The national debt reached an all-time high of $35.668 trillion on October 1st, up $827.887 billion from $34.841 trillion on July 1st, according to the U.S. Treasury Department's Debt to the Penny system.


Fidelity Investments says the rising national debt is a “threat to Americans’ prosperity and security.”

Fidelity estimates the debt-to-GDP ratio might expand from 123% to 166% in 30 years due to rising interest costs, decreasing the US government's capacity to spend on economic stimulus initiatives.

Rising debt threatens long-term economic development by setting the stage for major tax increases in the future. Higher taxes may restrict firms' and individuals' spending and borrowing to boost the economy.

affect GDP growth will likely affect business profits and stock prices since earnings drive stock prices.

The trillion-dollar asset manager adds,

Rising debt could slow growth and volatility in the long term and raise inflation if policymakers cut interest rates to lower the government's borrowing cost to avoid tax hikes or unpopular Medicare and Social Security cuts. Lower interest rates and other expansionary monetary policies have traditionally fueled inflation.

The large US national debt might have disastrous long-term effects, argues Fidelity.

In the long run, large national debt may impede economic development, raise taxes and inflation, lower investment returns, and slash Medicare and Social Security benefits.

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