Trump Suggests Bitcoin as Solution to $35T National Debt

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As a seasoned analyst with over three decades of experience in the financial markets, I’ve witnessed firsthand the ebb and flow of economic cycles, from the dot-com bubble to the global financial crisis. The current state of the U.S. national debt is indeed alarming, and it’s refreshing to see innovative ideas like leveraging Bitcoin being floated by influential figures such as Donald Trump and Robert F. Kennedy Jr.

During a discussion on Fox News with host Maria Bartiromo, ex-President Donald Trump proposed an intriguing concept: potentially employing Bitcoin as a means to address America’s staggering $35 trillion national debt.

The potential GOP presidential candidate for 2024 emphasized the expanding crypto market, stressing that America needs to advance in the digital currency field to remain competitive globally. Trump proposed that maybe Bitcoin could help tackle our country’s significant financial issues, such as its debt crisis.

Over time, as the United States government keeps increasing its money supply to handle current debts, the worth of Bitcoin has been incrementally climbing in comparison to the dollar. It’s significant to note that it took around 200 years for the U.S. debt to reach $1 trillion initially; however, now, an equivalent amount is being added approximately every three months as a result of overspending.

Presently, approximately 76% of the income tax funds go towards addressing our debt, which means that interest repayments are a significant financial issue we’re dealing with in terms of budgeting.

As a hardworking individual who has always tried to live within my means and save for the future, I find it disheartening to see that a large portion of my hard-earned income goes towards servicing the national debt. The fact that this debt was largely accumulated by two presidents who oversaw significant financial missteps – FDR and Richard Nixon – makes me question the decisions made in the past and wonder if we are still paying for their mistakes today. It’s concerning to think about how our country’s financial future is being impacted by these choices, and it makes me worry about what kind of world I will leave behind for my children and grandchildren. I can only hope that future leaders will learn from the past and make different decisions to ensure a more stable financial future for all Americans.

— Peter St Onge, Ph.D. (@profstonge) July 26, 2024

As someone who has spent years studying economics and finance, I find Donald Trump’s idea of using Bitcoin to pay off the U.S. national debt intriguing, albeit highly unlikely. While it is true that Bitcoin’s finite supply makes it a potentially effective tool against inflation, the sheer magnitude of the $35 trillion dollar debt would require an astronomical amount of Bitcoin, which currently has a total market cap of only around $800 billion. Additionally, the volatility and speculative nature of Bitcoin make it a risky proposition for such a critical financial decision.

Bitcoin offers a potential solution by channelling value from the depreciating dollar into a finite digital asset, possibly preventing a severe currency collapse similar to the Weimar Republic’s plight in the early 20th century. 

More recently, Robert F. Kennedy Jr. expressed a similar idea, proposing that establishing a Bitcoin reserve might aid in lowering the country’s debt, given Bitcoin’s increasing worth over time.

Furthermore, Senator Cynthia Lummis has introduced legislation that aims to create a Bitcoin strategic reserve. The proposed bill suggests the U.S. Treasury should acquire approximately 5% of all existing Bitcoins and keep them for at least two decades. This reserve would function as a protection against excessive money creation and help maintain America’s financial influence in international markets.

Trump’s and Lummis’ plans for Bitcoin, which hint at a strengthening conviction that digital currencies could offer stability and rejuvenate the American economy during financial difficulties, are gaining traction.

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2024-08-03 09:57