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- đ° 5 Fact Friday: Americaâs $35 Trillion Problem
đ° 5 Fact Friday: Americaâs $35 Trillion Problem
In 2024, the government is on track to record a $1.9 trillion deficit. That may sound like a lot, but as the worldâs largest economy, is it really a problem?
Hey Money Maniacs,
Welcome back! Letâs get into this weekâs biggest stories in the world of money.
Todayâs issue covers:
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ECONOMY
1. Americaâs $35 Trillion Problem đŚ
The U.S. national debt just soared past $35 trillion, up from $34 trillion in January. This staggering number reflects a growing problem driven by unchecked federal spending and elevated interest rates.
But how do we make sense of $35 trillion? Let's break it down.
Deficit as Credit Card Debt
In 2024, the government is on track to record a $1.9 trillion deficit, the third-largest in U.S. history. This yearâs deficit is only surpassed by the COVID âstimmiesâ of 2020 and 2021 when the economy was shrinking faster than an Ozempic waistline.
To cover this excess spending, the government racks up debt, much like you might run up a credit card bill.
The only difference is⌠the governmentâs balance stands at $35 trillion.
Now that sounds like a lot, but as the worldâs largest economy, is it really a problem? Here are 3 ways to dive a level deeper:
Debt / GDP
Think of the debt-to-GDP ratio like your personal debt-to-income ratio. At 121.7%, it's like owing $121,700 for every $100,000 you earn in a year.
Clearly, the debt level is staggering, even considering the size of our economy.
Interest Payments / Tax Revenue
Maintaining this debt now costs $1.1 trillion per year, or 36% of all tax revenue collected.
Imagine if 36% of your paycheck went straight to credit card interestânot even principal! Ouch.

Debt Per Capita
Next, divide $35 trillion by the U.S. population of approximately 330 million. Each citizen, including children, theoretically owes around $106,000.
Letâs all chip in and pay our part! What do you say? đ
The Takeaway
Just like in personal finance, high debt levels limit future flexibility. If the government spends too much on interest payments, thereâs less money to go around for infrastructure, education, and healthcare.
It feels an awful lot like skimping on home repairs because youâre still paying off last year's shopping spree.
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COMMODITIES
2. Gold Takes Center Stage đĽ
With the Olympics in full swing, gold isnât just for athletesâitâs winning big in the markets too!
The price of gold recently reached a new all-time high and is currently sitting just shy of $2,500 per ounce. Several factors are driving this surge.
First, geopolitical tensions, like the ongoing Israel-Hamas conflict, have historically pushed investors toward safe havens.
Central banks are also playing a major role. Theyâve been on a gold-buying spree, setting a new first-quarter record in 2024. China leads the pack, adding 27 tons in Q1 alone.
This trend is partly driven by Americaâs use of financial sanctions against Russia. Weaponization of the dollar has led some countries to further diversify their reserves, trading U.S. Treasuries for gold.

Lastly, falling interest rates are boosting gold.
The European Central Bank, Bank of Canada, Bank of China, and several others have already reduced rates. The U.S. is expected to follow suit as soon as September.
As rates come down, bonds lose their luster. This is when gold can shine bright, drawing in those risk-averse investors.
Know The Community: Poll Question đŹ
I want to make sure 5 Fact Friday is hitting the mark for YOU! To do that, Iâll be running polls each week to learn how I can improve.
Here are the top 3 results from last weekâs poll:
What percentage of your net worth is in your home?
1. Less than 25% (35%)
2. 25% to 50%
3. 0% â Iâm a renter!
Vote in todayâs poll and help me help you! đď¸
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POLITICS
3. Inside Kamalaâs Investments đ
Whatâs the scoop on Kamala Harris's finances and why do we care?
Itâs the same reason we track Nancy Pelosiâs trades and make note of Donald Trumpâs real estate holdings. Like it or not, itâs rational to act in oneâs self-interest and politicians are certainly not above doing so.
Now that Harris has a real shot at the presidency, letâs take a quick look at her and her husband Doug Emhoffâs incentives.
Income and Assets
Income: In 2023, Harris and Emhoff earned $450,299. This includes Harrisâs vice presidential salary of $218,784, Emhoffâs $174,994 from Georgetown University, and ~$6,000 from book royalties.
Retirement Savings: They hold between $1.79 million and $4.4 million in retirement accounts. Emhoffâs IRAs total between $1.27 million and $3.19 million, while Harrisâs 401(k)-type accounts are worth between $525,000 and $1.25 million.
Cash and Bank Accounts: They have between $850,000 and $1.7 million spread across four bank accounts.
Pensions: Harris is eligible for a state pension of $3,981 per month starting in October, and she has another pension from the San Francisco Employeesâ Retirement System valued between $250,001 and $500,000.
Real Estate: They own a 3,500-square-foot home in Los Angeles, valued around $5 million. The property carries a $2 million, 2.625% seven-year adjustable-rate mortgage (ARM), ending in 2027.
Investment Strategy
The coupleâs portfolio is relatively boring, which is refreshing for a politician.
Less than half of their ~$7 million net worth is in stocks, and they do not hold any individual securities or have any sector concentration.
The Takeaway
Harrisâs finances are quite conservative. Her diversified holdings align her financial incentives with the residential real estate and stock marketsâjust like most Americans.
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MARKETS
4. Big Tech Earnings Breakdown đ¸
The recent rotation out of Big Tech has been swift and painfulâwiping out more than $2 trillion in market value.
Now, with earnings season underway, letâs see if Microsoft, Meta, Apple, and Amazon managed to weather the storm or if they are in for more turbulence.

$MSFT Slides 1.4% on Slowing Cloud Growth
Microsoft reported a solid quarter, beating expectations on revenue and earnings. However, the 15% sales increase wasnât enough for investors.
Azure, Microsoftâs cloud business and main growth driver, slowed slightly. This has led investors to question the payback period of heavy AI and data center investments.
$META Rips 4.8% on Increased Ad Sales
Meta exceeded sales expectations with $39.1 billion, thanks to AI-driven improvements in ad targeting. Zuckerberg also predicted that the Meta chatbot would be the most widely used AI assistant in the world by year-end.
Although Meta intends to ramp up AI investment, the companyâs Q2 results created optimism about the revenue potential of these initiatives.
$AAPL Up Slightly Despite iPhone Sales Drop
Apple saw a 1% drop in iPhone sales, down to $39.3 billion, marking the lowest level in three years. This dip was offset by strong performance in iPads (up 24%) and services (up 14%).
Overall, revenues rose 5% to $85.8 billion, and profits grew 8%. Struggles in China and the absence of overt innovation are ongoing challenges, but next monthâs new AI-powered phone models may help turn the tide.
$AMZN Hammered on Disappointing Forecast
Amazon reported earnings of $1.26 per share, beating estimates. But the companyâs Q2 revenue and Q3 guidance fell short, leading to a 7% drop in after-hours trading.
AWS, Amazon's cloud business, posted strong results but its booming ad segment slightly missed targets. Like $MSFT, the companyâs heavy infrastructure investments are ramping upâand being second-guessed.
MANIAC PICKS
The FTC investigates "surveillance pricing" to determine if companies use advanced consumer data to raise prices. Spoiler: they do.
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Consumer confidence ticked up to 100.3 in July, from 97.8 in June. Although future expectations improved slightly, views on current conditions declined.
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PERSONAL FINANCE
5. Emergency Funds Unlocked đ
Need emergency cash? The IRS now allows penalty-free withdrawals of up to $1,000 from your traditional retirement account.
Here's the scoop:
The IRS already permits hardship distributions, early withdrawals, and loans in times of need. However, these options require you to meet specific qualifications and fill out time-consuming paperwork.
The new rule simplifies accessing your funds in a pinch. The IRS has broadened the definition of an emergency to cover any ânecessary emergency personal expenses.â
This includes everything from medical bills and car repairs to any urgent personal expense you can justify. Unlike previous rules, you no longer need to provide much documentation to access your funds.
This option is designed for those who may not have $1,000 readily available in their checking or savings accounts. Itâs a quicker and cheaper alternative to high-interest credit cards or personal loans.
But there are caveats:
You can only make one withdrawal per year.
You canât deplete your account below $1,000.
Not all 401(k) plans have adopted this rule.
If you don't repay the withdrawal, you must wait three years before making another emergency withdrawal.
The benefits of extra liquidity are obvious. However, there are two hidden drawbacks.
You'll still owe income tax on the withdrawn amount if you don't repay it.
Tapping into your retirement funds can jeopardize your long-term financial security. With Social Security's long-term future uncertain, this is not a risk to be taken lightly.
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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