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Video: Donald Trump’s $20 Trillion Problem

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Presented by: Texas Precious Metals


The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

Only a few days after Trump’s inauguration ceremony, the U.S. National Debt will creep across the important psychological barrier of $20 trillion.

It’s a problem that’s been passed down to him, but it certainly puts the incoming administration in a difficult place. The debt is burdensome by pretty much any metric, and the rate of borrowing has exceeded economic growth pretty much since the late 1970s.

How Trump deals with this escalating constraint will be a deciding factor in whether his administration crashes and burns – or ends up re-positioning America for greatness.

Donald Trump’s $20 Trillion Problem

Partisans will squabble about who added what to the mounting debt, but the reality is that none of that really matters. Both parties have kicked the can down the road for the last 40 years, and that has culminated in the current situation:
Debt incurred under each President

Back in 1979, the debt-to-GDP ratio was a modest 31.8%, and the federal government only had an outstanding tab of $826 billion. Fast forward to today, and the perpetual borrowing has added up.

The debt-to-GDP is now 104.2%, with the total debt burden nearing the $20 trillion mark.

US government debt to GDP

In absolute terms, the debt is the highest it has ever been. Using the common measure of debt-to-GDP, the debt is the highest it’s been in 70 years. The last time it soared past the 100% mark was during the final year of WWII.

Granted, the situation isn’t as bad as Greece, Cyprus, or Japan – but it’s getting there:

Debt to GDP

In terms of debt-to-revenue, a measure that compares the national debt to the amount of taxes taken in by the federal government, the U.S. has the 2nd highest debt out of 34 OECD countries:

Debt to Revenue

On a “per person” basis, each person in the U.S. owes $61,300 – the second highest in the world. Per taxpayer, however, that amount balloons to $167,000.

Changing Rhetoric

So what does Trump think of all this debt business? It’s hard to say, because his rhetoric has changed.

At the start of his campaign, he made it clear that debt would be a top issue for his administration. In February 2016, Trump said that the U.S. was becoming a “large-scale version of Greece” and that tackling the debt would be “easy” with a more dynamic economy. In April 2016, he said he could pay off the debt after eight years in office.

This rhetoric aligns with the official GOP platform, which says that the national debt has “placed a significant burden on future generations”, calling for a “strong economy” and “spending restraint” to pay it down.

But since then, Trump’s views may have changed.

His most recent economic plans include $1 trillion in infrastructure and $5 trillion in tax cuts – and they could increase debt by anywhere from $5.3 to $11.5 trillion. He’s also said that the U.S. will never have to default because it can simply “print money”.

How Trump will choose to deal with the debt is a big question – and only time will tell if his actions will make America great again.

About the Money Project

The Money Project aims to use intuitive visualizations to explore ideas around the very concept of money itself. Founded in 2015 by Visual Capitalist and Texas Precious Metals, the Money Project will look at the evolving nature of money, and will try to answer the difficult questions that prevent us from truly understanding the role that money plays in finance, investments, and accumulating wealth.

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Mapped: Inflation Projections by Country, in 2024

Global inflation projections look optimistic in 2024, but risks of a second wave of price pressures remain due to geopolitical shocks.

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This map shows inflation projections around the world in 2024.

Inflation Projections, by Country in 2024

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Global economic prospects hang on a delicate balance, largely hinging on the path of inflation.

While inflation looks to be easing, there remains the risk of a second wave of price pressures driven by geopolitical conflicts and supply disruptions in the Red Sea. Adding to this, a stronger than expected labor market could drive consumer demand, pushing up higher prices.

This graphic shows 2024 inflation projections around the world, based on forecasts from the International Monetary Fund (IMF).

 

 

Is Global Inflation On a Downward Path?

In 2024, global inflation is projected to decline to 5.8%, down from a 6.8% estimated annual average in 2023.

Tighter monetary policy and falling energy prices are forecast to dampen price pressures alongside a cooling labor market. Below, we show inflation projections across 190 countries:

CountryProjected Annual Inflation Change 2024
🇻🇪 Venezuela230.0%
🇿🇼 Zimbabwe190.2%
🇸🇩 Sudan127.3%
🇦🇷 Argentina69.5%
🇹🇷 Türkiye54.3%
🇪🇬 Egypt25.9%
🇦🇴 Angola25.6%
🇮🇷 Iran25.0%
🇧🇮 Burundi22.4%
🇸🇱 Sierra Leone21.7%
🇸🇷 Suriname20.0%
🇪🇹 Ethiopia18.5%
🇵🇰 Pakistan17.5%
🇳🇬 Nigeria15.4%
🇲🇼 Malawi15.2%
🇬🇭 Ghana15.0%
🇾🇪 Yemen15.0%
🇲🇳 Mongolia12.8%
🇭🇹 Haiti12.7%
🇺🇿 Uzbekistan10.7%
🇹🇳 Tunisia10.6%
🇹🇲 Turkmenistan10.0%
🇺🇦 Ukraine10.0%
🇲🇬 Madagascar8.6%
🇰🇬 Kyrgyz Republic8.0%
🇿🇲 Zambia7.9%
🇲🇺 Mauritius7.8%
🇬🇳 Guinea7.8%
🇰🇿 Kazakhstan7.5%
🇧🇩 Bangladesh7.2%
🇲🇲 Myanmar7.2%
🇸🇹 São Tomé and Príncipe7.2%
🇬🇲 The Gambia7.1%
🇨🇩 Democratic Republic of the Congo7.1%
🇩🇿 Algeria6.8%
🇹🇯 Tajikistan6.5%
🇳🇵 Nepal6.5%
🇰🇪 Kenya6.5%
🇲🇿 Mozambique6.5%
🇹🇴 Tonga6.2%
🇸🇸 South Sudan6.1%
🇱🇷 Liberia6.0%
🇺🇾 Uruguay5.7%
🇻🇺 Vanuatu5.6%
🇵🇱 Poland5.5%
🇬🇾 Guyana5.5%
🇷🇼 Rwanda5.5%
🇭🇺 Hungary5.4%
🇳🇦 Namibia5.3%
🇬🇶 Equatorial Guinea5.2%
🇧🇹 Bhutan5.1%
🇦🇿 Azerbaijan5.0%
🇯🇲 Jamaica5.0%
🇱🇸 Lesotho5.0%
🇲🇩 Moldova5.0%
🇷🇺 Russia5.0%
🇺🇬 Uganda5.0%
🇳🇮 Nicaragua4.8%
🇵🇬 Papua New Guinea4.7%
🇷🇴 Romania4.7%
🇬🇹 Guatemala4.6%
🇼🇸 Samoa4.5%
🇿🇦 South Africa4.5%
🇸🇰 Slovak Republic4.5%
🇨🇴 Colombia4.5%
🇮🇳 India4.4%
🇧🇼 Botswana4.4%
🇸🇿 Eswatini4.3%
🇱🇻 Latvia4.3%
🇭🇳 Honduras4.2%
🇳🇷 Nauru4.2%
🇧🇪 Belgium4.0%
🇮🇸 Iceland4.0%
🇹🇿 Tanzania4.0%
🇰🇮 Kiribati4.0%
🇲🇷 Mauritania4.0%
🇵🇾 Paraguay4.0%
🇷🇸 Serbia4.0%
🇩🇴 Dominican Republic4.0%
🇦🇲 Armenia4.0%
🇧🇷 Brazil3.9%
🇸🇴 Somalia3.9%
🇹🇻 Tuvalu3.8%
🇧🇴 Bolivia3.8%
🇧🇾 Belarus3.7%
🇨🇲 Cameroon3.7%
🇽🇰 Kosovo3.7%
🇪🇪 Estonia3.6%
🇧🇧 Barbados3.6%
🇸🇧 Solomon Islands3.6%
🇦🇱 Albania3.6%
🇦🇺 Australia3.4%
🇪🇸 Spain3.4%
🇵🇭 Philippines3.4%
🇻🇳 Vietnam3.4%
🇲🇦 Morocco3.3%
🇸🇮 Slovenia3.3%
🇦🇹 Austria3.2%
🇭🇷 Croatia3.2%
🇨🇬 Republic of Congo3.2%
🇳🇴 Norway3.2%
🇸🇬 Singapore3.2%
🇲🇽 Mexico3.2%
🇹🇩 Chad3.1%
🇲🇪 Montenegro3.1%
🇱🇹 Lithuania3.1%
🇨🇷 Costa Rica3.0%
🇰🇭 Cambodia3.0%
🇮🇹 Italy3.0%
🇨🇱 Chile3.0%
🇬🇪 Georgia3.0%
🇬🇼 Guinea-Bissau3.0%
🇮🇶 Iraq3.0%
🇱🇦 Lao P.D.R.3.0%
🇫🇲 Micronesia3.0%
🇩🇲 Dominica2.9%
🇸🇪 Sweden2.8%
🇩🇪 Germany2.8%
🇬🇷 Greece2.7%
🇲🇾 Malaysia2.7%
🇮🇪 Ireland2.6%
🇯🇵 Japan2.6%
🇫🇯 Fiji2.6%
🇲🇭 Marshall Islands2.6%
🇬🇩 Grenada2.6%
🇺🇸 United States2.6%
🇵🇹 Portugal2.6%
🇮🇱 Israel2.6%
🇧🇸 The Bahamas2.6%
🇯🇴 Jordan2.6%
🇱🇾 Libya2.5%
🇳🇿 New Zealand2.5%
🇧🇯 Benin2.5%
🇩🇰 Denmark2.5%
🇩🇯 Djibouti2.5%
🇸🇲 San Marino2.5%
🇹🇱 Timor-Leste2.5%
🇮🇩 Indonesia2.5%
🇦🇬 Antigua and Barbuda2.5%
🇳🇪 Niger2.5%
🇨🇫 Central African Republic2.5%
🇵🇸 West Bank and Gaza2.5%
🇲🇻 Maldives2.4%
🇲🇹 Malta2.4%
🇳🇱 Netherlands2.4%
🇸🇨 Seychelles2.4%
🇬🇧 United Kingdom2.4%
🇬🇦 Gabon2.4%
🇰🇳 St. Kitts and Nevis2.3%
🇭🇰 Hong Kong SAR2.3%
🇲🇰 North Macedonia2.3%
🇦🇪 UAE2.3%
🇹🇹 Trinidad and Tobago2.3%
🇶🇦 Qatar2.3%
🇵🇦 Panama2.2%
🇸🇦 Saudi Arabia2.2%
🇵🇪 Peru2.2%
🇨🇾 Cyprus2.2%
🇨🇿 Czech Republic2.2%
🇹🇬 Togo2.2%
🇧🇬 Bulgaria2.2%
🇦🇼 Aruba2.2%
🇨🇦 Canada2.1%
🇧🇦 Bosnia and Herzegovina2.1%
🇱🇨 St. Lucia2.1%
🇦🇩 Andorra2.0%
🇧🇫 Burkina Faso2.0%
🇨🇻 Cabo Verde2.0%
🇨🇮 Côte d'Ivoire2.0%
🇰🇷 Korea2.0%
🇲🇱 Mali2.0%
🇻🇨 St. Vincent and the Grenadines2.0%
🇨🇭 Switzerland1.9%
🇵🇷 Puerto Rico1.9%
🇨🇳 China1.9%
🇫🇮 Finland1.9%
🇫🇷 France1.9%
🇹🇼 Taiwan1.8%
🇵🇼 Palau1.8%
🇹🇭 Thailand1.8%
🇱🇺 Luxembourg1.7%
🇸🇻 El Salvador1.7%
🇲🇴 Macao SAR1.7%
🇴🇲 Oman1.7%
🇰🇲 Comoros1.6%
🇧🇳 Brunei Darussalam1.5%
🇪🇨 Ecuador1.5%
🇧🇭 Bahrain1.4%
🇧🇿 Belize1.2%
🇸🇳 Senegal0.3%

Venezuela, with the largest oil reserves globally, is projected to see inflation reach 230%—the highest overall.

Across the last decade, the country has faced hyperinflation, reaching a stunning 10 million percent in 2019. Since U.S. sanctions were lifted last year, inflation has fallen dramatically due to sharp cuts in government spending and increasing dollarization of the economy, which is bolstering the bolivar.

In America, slower economic growth coupled with a softening labor market could ease inflation, which is forecast to reach 2.6% in 2024. While the Federal Reserve has signaled that the worst is over, unexpected momentum across the economy could cloud the outcome. As of November 2023, $290 billion in excess savings were held across American households, which may continue to spur consumer demand.

Over in Europe, inflation is anticipated to average 3.3% across advanced economies. Today, sinking natural gas prices and low GDP growth are keeping inflation expectations at bay.

China, the world’s second-largest economy, is contending with falling prices due to property market trouble, which drives about a third of the country’s economic growth. Amid sluggish economic activity, a manufacturing slowdown, and low consumer confidence, inflation is forecast to reach 1.7%.

What Could Cause Inflation to Re-Accelerate?

While inflation shocks driven from the pandemic appear to be over, key risks could drive up inflation:

  • Geopolitical Pressures: Rising shipping costs due to the conflict in the Middle East and Red Sea could continue to escalate and energy prices could increase amid disrupted supply, driving inflation higher.
  • Strong Consumer Demand: Accumulated excess savings could continue to fuel economies, leading central banks to remain hawkish. Persistently high wage growth—which increased about double the pre-pandemic average across advanced nations in 2023—could boost consumption and higher prices.
  • Rising Housing Costs: Shelter makes up about a third of the Consumer Price Index, the biggest component overall. If prices accelerate, it presents key inflationary risks. As of January 2024, U.S. shelter costs increased 6% annually.

So far, the global economy has been resilient. While risk factors remain, inflation projections suggest that the path towards a 2% target is slow, but going in the right direction.

 

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