Tech billionaire Peter Thiel says the US economy would already be in a recession if not for massive government intervention.

Speaking with fellow billionaire Chamath Palihapitiya at the All-In Summit 2024, Thiel says that an economic downturn is in sight for the US but it is being kept at bay by the government stimulating economic activity through spending.

According to the billionaire, the government stimulus is unsustainable as it is being fueled by “crazy” budget deficits.

“I suspect we’re close to a recession. I’ve probably thought this for a while. It’s being stopped by really big government spending. In May of 2023, the projection for deficit in fiscal year 2024, which is October of 2023 to September 2024, was something like $1.5 [to] $1.6 trillion. The deficit is going to come in about $400 billion higher…

A sort of crazy deficit was projected, and it was way off. And if we had not found another $400 billion to add to this crazy deficit at the top of the economic cycle – you’re supposed to increase deficits in a recession, not at the top of the cycle – things would be probably very shaky.

We have too much debt, not enough sustainable growth.”

Data from the Congressional Budget Office shows that the US government has recorded a $1.9 trillion budget deficit for the first 11 months of the 2024 fiscal year. According to the CBO, the figure represents a $373 billion jump from the deficit recorded over the same period during the previous fiscal year.

Meanwhile, data from the Treasury Department shows that the US national debt has soared to a historic high of $35.273 trillion.

Generated Image: Midjourney