Are we about to see a ‘ticking debt time bomb’ go off?
Posted On July 7, 2024
Most of us who have had to manage our own finances for any amount of time know by now that carrying and building debt over a long period of time is generally not a good thing.
Unfortunately, it doesn’t appear that our government has ever learned this lesson. It has continued to build debt, through both Republican and Democratic administrations, and economist Connor Lokar believes those chickens will soon be coming home to roost.
Lokar, our guest in the latest episode of “What’s Working with Cam Marston,” says he and his group, ITR Economics, believe we should start to see some improvement in the economy in the short term.
“We really think, after this year, we should get a generally clean runway for growth for the next three to five years after 2024 to round this decade,” he said.
But then, he added, things could get “really interesting.” And he doesn’t think it’ll be affected much either way by the outcome of the 2024 presidential election.
“Really the most consistent theme between parties is that they spend money we don’t have, and they add to the deficit,” he said. “The debt issue is such a known and obvious issue and no one talks about it.
“Our position is essentially that the ticking debt time bomb goes off at the end of the decade.”
With government spending leading to prolonged inflation and retiring Baby Boomers expected to drain Social Security, Lokar said he expects to see a recession – possibly a depression – that will be worse and last longer than the 2008 economic downturn.
What should we be doing about it? Lokar advised business owners and managers to “take some big swings” now to take advantage of what should be a brighter outlook over the next couple of years. Hopefully that will help you weather the storm that he sees coming in 2030.
Could anything keep that storm from coming? Lokar is doubtful, but says artificial intelligence could help by increasing productivity and improving the healthcare climate. But he doesn’t think it’ll be enough.
“We think we’re pretty firmly on this track,” he said. “We’ve been saying this for over 10 years. Everything we thought would go bad has gone worse than we thought. We do not think there’s any dodging this tanker at this point.”