Dave Ramsey has seen it all when it comes to predictions about the economy. And when it comes to the national debt, he's clear: people have been sounding alarms about an “economic end of the world” for decades, but so far, they've been consistently wrong.
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Ramsey shared his thoughts on the topic, explaining how, in his late 20s, he was deeply worried about the rapid growth of the national debt. Back then, he thought it might lead to a complete economic collapse. "I've observed people in my world write books about the economic end of the world," he said. "And they keep being wrong, so I don't want to write that book."
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While he acknowledges that the debt is a serious concern, Ramsey doesn't believe it's about to cause the economy to crash. "Is it concerning? Yeah, it's concerning. But is it going to cause a crash? Apparently not," he said.
Ramsey explained that the national debt impacts the economy in subtle but important ways. The government funds its debt by selling Treasury bonds, which investors buy because they earn interest. But Ramsey points out that if those investors had put their money into businesses or other productive areas of the economy instead, it could have created more growth and opportunities.
"It's stealing money from the economy in that sense," Ramsey said. He added that the cost of interest payments on the debt is increasingly consuming the federal budget. "The interest only on it is becoming a larger and larger portion of the ‘budget,' as if they've got a budget."
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Confidence in the Market
Despite his concerns about the national debt, Ramsey remains confident in the stock market as a safe place for investment. He admitted that there's always been some level of manipulation in the market, but he still encourages people to invest. "I do think it's still a safe place for people to invest. I've got millions and millions of dollars in mutual funds," he said.
Right now, the national debt stands at a staggering $36 trillion. It's such a huge number that it's hard for most people to wrap their heads around. In perspective, if you tried to count to 36 trillion at one number per second, it would take over a million years.
This massive debt has real consequences. A big chunk of the government's budget now goes to paying interest on that debt, leaving less money for things like improving infrastructure, supporting education or funding health care.
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