President Donald Trump on Friday declared a national emergency in order to bypass Congress and appropriate funds for his border wall between the U.S. and Mexico. But that’s hardly the biggest threat facing the U.S. right now, noted economist Peter Schiff says. In fact, it’s the $22 trillion debt.
“Of course, the real national emergency is not the failure to build a wall, but building up $22 trillion in national debt,” Schiff said on his podcast.
The US Treasury said last week that the national debt has officially passed the $22 trillion threshold. It stood at $19.95 trillion when Trump took office and has now grown $2.06 trillion in just two years.
But that’s just the tip of the iceberg, Schiff said.
“This is just a funded portion of the debt. This is where the U.S. government sells a bond and somebody owns that bond,” he said. “It doesn’t include liabilities like what the government owes for Social Security or guaranteed bank deposits or mortgages or student loans or all that nonsense. That’s not there. Those are contingent liabilities. They’re just as real. They’re not even part of the national debt.”
Side note: Schiff also mentioned the student and auto loan debt on Facebook this week.
“Both auto and student loan delinquencies are at record highs and headed much higher. If they are this high with 4% unemployed, imagine how much higher they will be during the coming recession, when the unemployment rate is significantly higher!” Schiff wrote while sharing a Yahoo Finance story, “U.S. Student Debt In ‘Serious Delinquency,’ Tops $166 Billion.”
Schiff points the finger at Trump and the formerly debt-conscious Republican party that held both branches of Congress and the presidency the first two years Trump was in office.
“We are headed for a train wreck in this country because of the national debt,” Schiff said. “What Trump has been building while he hasn’t been building a wall is he’s been building up the size of government, and he’s been building up the deficits that have been necessary to finance that government buildup.”
Trump didn’t mention the national debt during his State of the Union address and when asked if he would talk about it, White House Chief of Staff Mick Mulvaney replied, “Nobody cares.”
Of course, the national debt has been steadily growing since President Bill Clinton and the GOP-controlled Congress carved out a brief surplus in 2001.
President Barack Obama grew the debt in just eight years — from $10.6 trillion to $19.9 trillion — almost as much as it did in the entire 232-year history of the country before him.
Schiff says people should care because it’s all going to blow up in our faces in the form of a catastrophic recession at some point.
“Just because we haven’t suffered a crisis yet based on this debt doesn’t mean that one isn’t coming,” Schiff said. “In fact, there’s no way around it. It’s just a question of when. It’s not a question of if, it’s a question of when. And I think when is a lot closer than a lot of people think.”
For his part, Trump reportedly has said in the past, “I won’t be here” when the debt explodes.
Editor’s note: Do you care about the national debt? Share your thoughts below.