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.

Over the past year, gold has climbed more than 80%.

Why?

Because inflation isn’t dead. Because debt isn’t sustainable. Because equities look priced to perfection. Because bonds yield less than honest work. And because every institution you thought was safe is now a political football.

Is it peak gold? Maybe. But previous gold rallies have lasted for years. The storm hasn’t passed — it’s only beginning to darken. Many of the risks keeping investors up at night are unlikely to go away soon.

The S&P 500 may be sitting near a record 7,000. But relative to gold, it’s been in decline.

Over the past three years, the market is up 45%, but gold is up 180%. Today the ratio of the S&P to gold is down to 1.39.

Silver is now up 54% year-to, err, month-to-date. And up over 280% since the start of 2025.

While we don’t know how much further upside is left, prior parabolic moves like these tend to lead to big pullbacks when they end.

“If you’re tempted to take a screenshot of your portfolio, it’s a good idea to take some profits while you’re doing that,” suggests our Portfolio Director, Andrew Packer.

We’d do so to grab some of those silver profits, simply because even though we started dollar-cost-averaging (DCA) into gold and silver in 2018 – silver was $16.47 – no assets can go parabolic, like silver has, indefinitely.

Gold and silver are making new highs. Gold knocked on the door of $5,100 in overnight trading in Shanghai this morning. Silver, not to be outdone, is driving resource traders wild, cracking $116 up 15% today alone.

A year ago, one bitcoin bought roughly 40 ounces of gold. Today it buys 18.

Bitcoin was marketed as digital gold. Instead, Wall Street wrapped it in ETFs, margin accounts, and structured products.