In a recent interview on the Money Metals podcast, host Mike Maharrey sat down with economist and internet personality Dr. Peter St. Onge to discuss pressing issues surrounding U.S. national debt, government spending, and economic recovery strategies under the current administration. The conversation shed light on the alarming fiscal trajectory of the United States and potential solutions to avoid economic collapse.(Interview Starts Around 3:19 Mark) The Burden of National DebtPeter St. Onge painted a sobering picture of the U.S. fiscal state. The national debt stands at $36 trillion, with $1.2 trillion in annual interest payments—equivalent to the entire federal budget during Bill Clinton’s presidency. Coupled with annual budget deficits nearing $2 trillion, projections suggest that the debt could climb to between $50 and $75 trillion within decades. St. Onge warned that such fiscal mismanagement could push the U.S. economy into a prolonged decline, similar to Argentina’s transformation from a prosperous nation to one plagued by poverty and economic instability.”Countries don’t default because they can’t pay; they default when political leaders decide to shift the blame to foreign creditors,” St. Onge explained, pointing to Greece’s 2011 crisis as an example. He emphasized that with enough political momentum, the U.S. could theoretically erase $26 trillion of debt through selective default, but this would come at the cost of banking system collapse. Political Will and the Challenges of ReformDespite the dire situation, St. Onge expressed cautious optimism about recent political shifts. He noted that ongoing initiatives, such as efforts to audit and cut wasteful federal programs, could provide meaningful fiscal relief. According to St. Onge, agencies like the Department of Education are under scrutiny, with possible budget reductions in the pipeline. The economist highlighted that the U.S. government spends over half a trillion dollars monthly, much of it going to programs that do little to benefit taxpayers.He believes that the anti-establishment movement, symbolized by figures like Elon Musk, could finally lead to real government reform. Musk’s forensic approach to uncovering wasteful spending, including fraud and unauthorized payments, has already revealed opportunities for cutting billions without requiring congressional approval. St. Onge speculated that these efforts could result in defunding politically entrenched organizations that have long relied on federal subsidies. Trump’s Economic Strategy: A Path Forward?Turning to the potential for economic growth, St. Onge praised former President Donald Trump’s focus on regulatory and tax reform. If successful, a reduction in red tape and corporate taxes could incentivize domestic manufacturing, countering the reliance on foreign imports. St. Onge cited Trump’s previous tariffs as an effective, albeit misunderstood, policy tool. While tariffs raise prices on targeted goods, many of the costs are absorbed by foreign exporters through currency devaluation or direct subsidies from their governments. For example, China and Canada adjusted their currency policies to offset the impact of U.S. tariffs.St. Onge emphasized that the key to reversing the U.S. debt crisis lies in sustained federal spending cuts. “To step back from the fiscal cliff, we need to reduce spending by at least $1 trillion annually,” he argued. While this won’t eliminate the deficit, it would allow economic growth to outpace debt accumulation, stabilizing the country’s financial future. Inflation, Tariffs, and the Federal ReserveThe conversation also touched on inflation, a persistent concern for both investors and consumers. Maharrey observed that investment in physical gold and silver has declined since the election, possibly due to growing optimism about the economy. However, St. Onge cautioned that the Federal Reserve’s previous money-printing policies have left an inflationary overhang of 10-15% that has yet to manifest fully.St. Onge explained that as the economy improves, increased lending and investment could unlock this dormant inflation. He stressed the importance of reducing federal competition for resources—such as steel and labor—through spending cuts. Without these cuts, the private sector’s resurgence could trigger further price increases. A Tumor on the EconomyBoth Maharrey and St. Onge agreed that the government’s outsized role in the economy acts like a “tumor,” crowding out private sector growth. St. Onge underscored that federal spending often supports unproductive initiatives, contrasting with private investment that creates jobs, builds infrastructure, and drives innovation. He concluded that shrinking the federal government is essential to unleashing the full potential of the U.S. economy. Looking AheadSt. Onge anticipates that the next few years will be turbulent but potentially transformative. “It’s going to be a crazy four years,” he remarked, noting that ongoing reform efforts could significantly alter the U.S. economic landscape. As watchdog initiatives like Musk’s DOGE program continue to expose inefficiencies, there may be new opportunities to reduce debt, cut wasteful spending, and foster sustainable growth.Listeners can follow Peter St. Onge’s work on X (@profstonge), where he provides daily economic commentary. He also offers a weekly newsletter and podcast that delve into historical and contemporary economic issues with a focus on freedom and fiscal responsibility. Key Questions & AnswersThe following are the key questions and answers from the Money Metals podcast with host Mike Maharrey interviewing economist and internet personality Dr. Peter St. Onge:  What are “they” trying to do to us according to Peter St. Onge?Peter St. Onge explained that organized political forces, particularly on the left, aim to increase their power by using taxpayer money to fund activists and agendas. He characterized this as a long-term trend aimed at undermining individual liberties and controlling economic resources. Why does the national debt matter?St. Onge emphasized two critical aspects of the debt: day-to-day management and long-term consequences.

 Why don’t Americans seem more concerned about the national debt?St. Onge suggested that many Americans do not take the debt seriously because they do not expect it to be repaid. He pointed to the 2011 Greek debt crisis, where political leaders gained support by blaming foreign creditors and threatening to default. He warned that a similar scenario could unfold in the U.S. if populist politicians frame default as a way to punish Wall Street and foreign creditors. Can Congress and the administration make meaningful spending cuts?St. Onge expressed cautious optimism that recent efforts to reduce federal waste might succeed, particularly under pressure from figures like Elon Musk, who has exposed inefficiencies through data analysis. However, St. Onge noted that previous reform efforts often failed because they were led by Washington insiders unwilling to challenge the system.He pointed to Musk’s DOGE initiative, which has already identified billions in fraudulent or wasteful payments. St. Onge believes such efforts could help defund politically entrenched organizations and reduce spending by hundreds of billions annually. How do tariffs affect inflation and prices?St. Onge acknowledged that tariffs can mechanically raise prices on specific goods, such as avocados or Chinese toys. However, he argued that other factors, such as currency devaluation or reduced corporate profits, often offset these price increases.

 What is the Federal Reserve’s role in the current inflationary environment?St. Onge explained that the Federal Reserve has temporarily restrained inflation by raising interest rates. However, there is still a 10-15% inflationary overhang due to excess money printing during the COVID-19 era. He warned that as the economy improves and bank lending increases, this inflation could resurface unless the federal government reduces spending. What are the key obstacles to economic growth?St. Onge argued that the federal government is a major barrier to economic growth, likening it to a “tumor” that crowds out productive private sector activity. Government spending competes with private investment for resources, driving up costs for construction, labor, and materials. He stressed the need to shrink the federal government to allow the real economy to flourish. What are the prospects for U.S. manufacturing growth under Trump’s policies?St. Onge noted that Trump’s focus on regulatory and tax cuts could attract manufacturing back to the U.S.

 What is Peter St. Onge’s outlook for the next few years?St. Onge predicted that the next four years would be politically and economically volatile. However, he expressed optimism that ongoing reform efforts could stabilize the U.S. economy by cutting wasteful spending and encouraging private sector growth. He emphasized that reducing federal spending by at least $1 trillion annually is necessary to prevent fiscal collapse and control inflation.More By This Author:Reflecting On The Gold DemocratsTrump Pounds The Fed For Promoting Inflation, DEI, Green Energy US Corporate Bankruptcies Hit 14-Year High In 2024