- 2024-08-17
- News
US National Debt Tops $36 Trillion: Global Economy's Debt Alarm?
The changes within the United States have become a focal point for many, especially with the U.S. debt soaring, increasing by 1 trillion in just three months, now reaching 36 trillion dollars, how long can the U.S. sustain this?
Since Musk became the first administrator of the U.S. Department of Efficiency, he carefully reviewed the financial expenditures of the United States over the years and directly declared to the media "The U.S. is going bankrupt"! Why did Musk suddenly shout this out?
1 trillion increase in 3 months
The continuous rise in U.S. debt is severely testing the credit of the United States.
Finally, in September of this year, the Federal Reserve announced a rate cut, which also signaled the beginning of the rate-cutting cycle.
With the trade stick being wielded, many people are more cautious about the economic development of the United States, and China and Japan, the two largest holders of U.S. debt, continue to sell U.S. debt.
In just less than three months, U.S. debt has quickly increased by one trillion, which means it is increasing by 8.7 billion dollars every 24 hours.
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Such a rate of increase is truly astonishing, and the key is that U.S. debt will continue to be issued in the future. If the scale of U.S. debt continues to grow.
Given the current economic situation in the United States, there is no ability to repay the interest and principal due, which is a very terrifying thing for the United States and the world.
The reason why the scale of U.S. debt continues to rise is mainly related to the U.S. finance.
For example, Musk saw that from last year to September of this year, compared with the U.S. financial revenue and expenditure, the United States spent 6.75 trillion dollars and the revenue was 4.92 trillion dollars. After subtracting the expenditure from the revenue, the United States actually has a fiscal deficit of 1.83 trillion dollars.
The key is that the fiscal deficit is not just a current issue. If you add up the accumulation over the years, along with the continuous expansion of the U.S. debt scale, if it is not possible to repay the principal and interest within the specified time, the credit of the U.S. dollar will inevitably be tested, and it's no wonder that Musk said the United States is on the road to bankruptcy.
The United States is already in a difficult situation
In September, the Federal Reserve's rate cut led to an increase in U.S. debt prices and a decrease in yields. For most countries, bonds have a lower risk, and many countries happen to be a good time to buy U.S. debt.
The United States also has a group of allies supporting it, especially European countries.
The United Kingdom is particularly the case. In September, the UK increased its U.S. debt by 22.8 billion dollars, totaling 764.7 billion dollars.
Of course, the United States itself has also increased its holdings of U.S. debt. Although the scale of U.S. debt is rising, many people still believe that the U.S. economy is not a problem.
For the U.S. debt issue, what people are mainly worried about is the credit issue. If the U.S. debt repayment really has a problem, then the rise and fall of the U.S. dollar index will inevitably be affected, and then it will naturally affect the appreciation and depreciation of other countries' currencies.
In addition, the U.S. dollar can be settled and paid globally, and like gold, it can be used as a store of value currency for preservation. If the U.S. debt collapses, the global monetary system will naturally be severely impacted.
Faced with these issues, the United States and the Federal Reserve also have their own strategies to deal with them.
For example, the Federal Reserve has changed its monetary policy, and now the federal funds rate is between 4.5% and 4.75%. The Federal Reserve has a lot of room to lower the fund rate.
However, although the Federal Reserve has changed its monetary policy, for the Federal Reserve, it still does not want to continue to cut interest rates from the heart.
The Federal Reserve is now very worried that if the Federal Reserve continues to cut interest rates, the U.S. index will weaken, and then many countries holding U.S. debt will worry about the U.S. economy again.
However, for the troubles of U.S. debt, the United States has come up with a solution.
It can continuously raise the debt ceiling, or take other actions, such as the Federal Reserve printing money to buy itself.
However, the solution to U.S. debt ultimately falls on the U.S. government, the American people, and American enterprises to work together to control and solve. Now the fiscal deficit is getting larger and larger, which also indicates that the United States is already in a difficult situation.
For the United States' financial revenue and expenditure, the attitude is now very clear.
First, control U.S. financial expenditures, such as deporting illegal immigrants in the United States, and also establishing a government efficiency department to simplify and observe the efficiency of U.S. government functions.
In addition, we have just seen that the U.S. financial revenue is less than the U.S. financial expenditure, so the fastest and most effective way to increase government financial revenue is to reduce welfare and financial revenue.
However, the American people are used to a high welfare life, and if the welfare benefits are reduced, it is unknown what kind of trouble will arise.
Although the United States imposes high tariffs on the outside, the sharp reduction in the domestic tax base, to a certain extent, hinders the increase in financial revenue, and the final payment for the external tariffs is actually the American people. It is just unknown whether the American people will agree at that time?
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