US Government Spending May Lead to Bankruptcy, Expert Warns

Mike Novogratz, the CEO of Galaxy Digital, has raised alarms about the current state of US government spending, suggesting that it is on a dangerous path that could lead to bankruptcy.

In an interview with Bankless, Novogratz criticized the massive increase in government spending under both Donald Trump and Joe Biden.

He pointed out that the federal budget now consumes 26% of the GDP, far above the recommended 20%, resulting in a significant deficit.

Novogratz explained that this 6% gap translates to an extra $1.5 to $2 trillion being spent annually without sufficient tax revenue to cover it.

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He argued that to address this imbalance, significant cuts to entitlement programs like Medicare, Medicaid, and Social Security are necessary—an action he believes is politically improbable.

Novogratz lamented that no politician is willing to make such cuts, which would inevitably lead to public outcry, especially from older citizens who rely on these benefits.

Novogratz also suggested that this unsustainable fiscal policy will likely push investors towards Bitcoin as a hedge against the potential decline of the dollar.

He expressed a pessimistic view of the government’s ability to address the financial crisis, citing a lack of political will from both major parties.

Alexander Stefanov