By now, it’s clear that the U.S. is about to have its fourth consecutive recession, and its fourth-largest since World War II.
But that doesn’t mean we should get complacent.
With the economy slowing and the country facing multiple problems, it may be time to take stock of what’s ahead for the next 4 years.
Here are four reasons why we need to pay attention.
The next recession won’t just be about the economy.
While there’s no silver bullet to address the issues that have led to the U, the federal government is spending more money to pay for other parts of its economic infrastructure, including the military and health care.
As the U economy slows, it also becomes harder to see how much of the federal budget can be paid for.
The Treasury Department estimates that federal spending on defense and homeland security will grow by more than $1 trillion over the next decade.
While the size of that spending is small compared to the size the economy is growing, it still represents a significant burden for the federal treasury.
It will be hard to see the spending cutbacks as anything but a waste of money.
Government borrowing will get worse.
For the next several years, the U will be borrowing more money than it spends.
That’s because Congress has increased its borrowing authority to a whopping $19 trillion over five years, from $10 trillion in 2009.
That has helped keep the U’s debt-to-GDP ratio at a record high of almost 100%.
And even with those high levels, the debt has ballooned to more than 150% of GDP.
That means the U is going to have to borrow money to keep the lights on. 3.
The U is at the precipice of another recession.
The Great Recession of 2008-09 saw a sharp increase in unemployment and the lowest growth since the 1930s.
That, combined with a massive increase in health care costs, have contributed to a massive deficit.
That deficit will get even worse when the federal debt reaches over 100% of the economy by 2020.
Government spending is a major source of the nation’s debt.
With more than half of all federal spending coming from Social Security and Medicare, the government must be careful about how much it spends to avoid having to borrow more money in the future.
The federal government spent $3.7 trillion on interest on the debt in 2016, a figure that has nearly doubled in the last 10 years.
If the U can’t get its fiscal house in order, there will be more pressure on the government to borrow to make up for the shortfall in the economy, and eventually lead to another recession or two.
So, should you care?
There are a lot of good reasons why you should care.
But as the economy slows and the U faces serious problems, the question becomes whether it is time to be more worried about the U or less worried about what the next recession may look like.