Every year, the United States spends more money than it takes in. The U.S. is over $27 trillion dollars in debt. Thanks to the government shutdown, this debt will increase. But what would happen if the FED stops printing money?
Many of the things we take for granted today would be drastically different. For one, the U.S. would have to start creating budgets that can be sustained based on monies we receive. This won’t be easy, because every year the U.S. budget deficit steadily increases.
This chart clearly shows the increased trend of spending more money than we bring in.
This chart shows the U.S. budget for 2020:
In other words, if we run this budget as shown here, we will not have enough money to cover it, and will have a budget deficit in the billions of dollars, or a possible deficit one trillion dollars.
So the next logical question is “if we can’t print the money to run our government, where will that money come from?”
Three areas are key for generating revenue: taxes, bonds, and exports. Unfortunately, there’s a problem with this idea:
- Many countries are purchasing less of our bonds. Many like China and Russia, are attempting to move away from the U.S. dollar.
- NO ONE wants to pay more in taxes. Raising taxes on the people means less spent in the economy.
- We are primarily a consumer nation. We import much more than we export (i.e. the trade deficit) as shown in the chart below.
In other words, if we can’t print money, there will be drastic changes to our overall quality of life. Budgets will be cut, inflation will more than likely increase, and taxes will be raised. This is a MESS of epic proportions.
This scenario isn’t discussed on mainstream media, but it’s something everyone should be aware of. People need to really start thinking about this and prepare for a potential new reality.
More than ever, it’s critical people discover ways to generate multiple streams of income and passive income. We must become producers. By creating your own products and services, you will be able to raise your prices accordingly to keep up with inflation and the cost of living.
Ask yourself the following questions:
- Will I be able to survive without government assistance (stimulus checks, food stamps, Medicaid, etc.?)
- How will rising food prices affect my household?
- Do I have enough in savings if I lose my job?
These are questions we all must think about.
Here is a short video on ways to combat inflation:
As the world changes, we must be ready, willing, and able to change along with it. It’s critical you don’t rest on your laurels and continue learning. Get more great tips in my book Invest For Success: Winning Wealth Strategies Not Taught in School. Available on Amazon.
Teach your kids about business as well. Many of the most important topics on business and entrepreneurship are not taught in school. Pick up a copy of Planting Seeds: The Children’s Guide to Entrepreneurship today. We owe it to our kids to give them the best opportunities to excel. This book is available on Amazon in English, French and Spanish.