America’s Ballooning Fiscal Gap Threatens to Blow Up Its Future

Lau Vegys, Doug Casey’s Crisis Investing

Today’s chart shows the path of U.S. government spending and revenues from 1989 to now, along with projections for the next 31 years.

See that gap between the lines? That’s where our debt comes from. Every year, when spending outpaces revenue, it’s like putting the difference on the national credit card.

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If you take a closer look, the late ’90s and early 2000s were the only time the government’s books weren’t a total mess. Revenues were up, spending was under control. We even toyed with the idea of paying off the national debt. Seems like a fairy tale now, doesn’t it?

But then the 2000s rolled in, and things took a turn. Wars, bailouts, you name it. The gap between what the government was taking in and what it was spending started to widen alarmingly. And just when we thought we’d seen it all, 2020 hit us like a freight train. COVID, lockdowns, stimulus checks galore. Government spending skyrocketed to 30% of GDP.

That was a recipe for a debt explosion, and that’s exactly what happened.

To put it in numbers, our national debt jumped from about $23 trillion at the start of 2020 to over $27 trillion by the end of the year. That’s a staggering $4.5 trillion increase in just one year! For perspective, it took the U.S. over 200 years to accumulate its first $4 trillion in debt.

At writing, we’re staring at $35.67 trillion and counting in national debt, with interest payments exceeding $1 trillion for the first time in history.

That’s grim, but the future doesn’t look any brighter. See that orange line stretching into the distance? That’s government spending, and it’s on an upward trajectory with no signs of slowing down. Meanwhile, the black line – that’s revenue – is barely budging. We’re looking at a gap that’s widening year after year, with no end in sight.

By 2054, we’re looking at spending levels above 30% of GDP with revenues hovering under 20%. This means we’ll be adding trillions to the national debt every single year, and that’s probably a best-case scenario. ~~ Lau Vegys, Doug Casey’s Crisis Investing

Lau Vegys, Doug Casey’s Crisis Investing

Today’s chart shows the path of U.S. government spending and revenues from 1989 to now, along with projections for the next 31 years.

See that gap between the lines? That’s where our debt comes from. Every year, when spending outpaces revenue, it’s like putting the difference on the national credit card.

Turn Your Images On

That was a recipe for a debt explosion, and that’s exactly what happened.

At writing, we’re staring at $35.67 trillion and counting in national debt, with interest payments exceeding $1 trillion for the first time in history.

Our forecast will feel obvious in hindsight and controversial in advance — the hallmark of a Grey Swan.

Most analysts we speak to are thinking in terms of the history of Western conflict.

They expect full-frontal military engagement.

Beijing, from our modest perch, prefers resolution because resolution compounds its power. Why sacrifice the workshop of the world, when cajoling and bribery will do?

Taiwan will not fall.

It will merge.

Wars, technology races, and political upheavals — all of them rest on fiscal capacity.

In 2026, that capacity will tighten across the developed world simultaneously. Democracies will discover that generosity financed by debt carries conditions, whether voters approve of them or not.

Bond markets will not shout so much as clear their throats. Repeatedly.

Taken together, the seven Grey Swans of 2025 behaved less like isolated events and more like interlocking stories readers already recognize.

The year moved in phases. A sharp April selloff cleared leverage quickly. Policy shifted toward tax relief, lighter regulation, and renewed tolerance for liquidity. Innovations began to slowly dominate the marketplace conversation – from Dollar 2.0 digital assets to AI-powered applications in all manner of commercial enterprises, ranging from airline and hotel bookings to driverless taxis and robots.

Back in April, when we published what we called the Trump Great Reset Strategy, we described the grand realignment we believed President Trump and his acolytes were embarking on in three phases.

At the time, it read like a conceptual map. As the months passed, it began to feel like a set of operating instructions written in advance of turbulence.

As you can expect, any grandiose plan would get all kinds of blowback… but this year exhibited all manner of Trump Derangement Syndrome on top of the difficulty of steering a sclerotic empire clear of the rocky shores.

The “phases” were never about optimism or pessimism. They were about sequencing — how stress surfaces, how systems adapt, and what must hold before confidence can regenerate. And in the end, what do we do with our money?!