US budget deficit has increased by 27% from the last year, making the total deficit around one trillion-dollar. According to numbers released by the government, revenues were $2.86 trillion in comparison to expenditures of $3.73 trillion. The US international debt has been on the rise from a long time now. President Donald Trump, when elected promised to pay off all the debt, but he has been unsuccessful so far, on the contrary, the debt has increased.
Federal Reserve decided to cut the tax rate, allowing corporations to pay from 36% to 21%. The revenue has actually gone up by 3.2% year to date. Economists believe most of the deficit has occurred because of funds spent on health care and the defence. Medical care rose by 11% to $66 billion and the defence expenditure raised from $10 billion from the previous year to $54 billion.
Can Bitcoin solve the deficit crisis?
Usually, a government solves deficit by increasing revenues or by allowing the federal reserve to print more currency to fill the gap between receipts and expenditure. But the longterm effect of printing new currency can be dangerous as its effects are adverse on the nation’s economy. If the federal reserve decides to print more currency, the value of the dollar will decrease in the long term. That’s where bitcoin comes in, cryptocurrency is anti-inflammatory in nature as it has a limited supply. The total debt that the country is under now, its very unlikely that they can ever pay it back. So the government has the option to adopt bitcoin to settle that huge amount of debt.
Bitcoin has the potential to solve the US budget deficit crisis if the central banks in place of opposing started adopting bitcoin. By allowing and encouraging corporates to invest in bitcoin, which can result in higher revenues for government through taxes as the bitcoin’s value surge. Many governments are already turning to this cryptocurrency for bettering their economy. Many economists and businessmen like bill gates and warren buffet have predicted that there will be another recession period like it happened a decade ago in 2008. And bitcoin will be the difference this time as it is not backed by any fiat currency and most investors would put their trust in the cryptocurrency when the dollar falls.