As high as 34.7 trillion, the U.S. debt is high, will the U.S. debt collapse?
Let's start with the conclusion, the surge in U.S. debt will drag down the global economy, and if U.S. debt continues to rise so unscrupulously, then U.S. debt is likely to collapse.
Why do I say that?
Some time ago, the Washington Post published a report titled The International Monetary Fund warned that the surge in US debt poses a risk to the global economy.
According to the report, the IMF believes that the U.S. government's budget deficit and rising debt burden pose a "growing risk" to the global economy.
There are two points to focus on here, the first is the debt burden, and the second is the budget deficit.
First, let's talk about the debt burden.
What is the current size of U.S. debt? According to the latest data from the U.S. Treasury Department, the size of the U.S. debt has reached $34.7 trillion so far.
What is this concept?
With a population of 332 million, the average U.S. person has more than $100,000 in debt.
In other words, the United States is not only a country where everyone is in debt, but more importantly, everyone is not less indebted.
In addition, U.S. debt is now growing at a rate like a "flood beast".
According to the latest survey data from the Congressional Budget Office, the US national debt will increase to a staggering $54 trillion in the next 10 years due to an aging population and high health care costs for the federal government.
In other words, the current debt problem in the United States is like a stalled train that is speeding wildly, for which Michael Peterson, CEO of the Peterson Foundation of the United States, said in an interview that the financial outlook of the United States is more dangerous and intimidating than ever, threatening our economy and the next generation.
In fact, the current huge debt scale of the United States has put a lot of pressure on it.
According to estimates from the U.S. Federal Budget Committee, interest payments on the national debt will increase from $475 billion in 2022 to $1.4 trillion in 2032, and are expected to increase to $5.4 trillion by 2053.
Earlier, Maya Maquiñas, chairman of the US Due Federal Budget Committee, said in an interview that "we are clearly on an unsustainable fiscal path."
Maquinias's remark is undoubtedly a vivid and vivid exposé of the true face of the US treasury of "eating too much food."
In other words, if the debt is allowed to grow so unscrupulously, the US fiscal will inevitably suffer a backlash in the future, and there is even a risk of a thunderstorm.
Secondly, let's talk about the budget deficit.
Let's start with the point of view, the soaring budget deficit in the United States has seriously affected the American economy.
For example, some time ago, the USA Today news website published a report that "economists warn that the government deficit is causing income problems for Americans."
Earlier, the Congressional Budget Office raised its estimate of the government deficit this year by 27% to $1.9 trillion, which is another $408 billion higher than the February forecast.
In fact, a surge in the U.S. fiscal deficit will push publicly held debt to its highest level since 1946 after the end of World War II.
According to historical records, after the end of World War II in 1946, the public debt of the United States accounted for 106% of the entire GDP of the United States.
And now that percentage will soon set a new record.
According to the latest data released by the nonpartisan Congressional Budget Office, the cumulative size of public debt holdings in the United States in 2023 is $26.2 trillion, and it is expected that the size of the public debt in the United States will reach $27.9 trillion by 2024, and the size of the public debt in the United States will soar to $48.3 trillion in 2034, ten years later.
In addition, according to this statistic, it is estimated that the debt held by the US public will account for 99% of the total GDP in 2024, in other words, the size of the US debt this year will be equal to the size of the entire US economy.
To make matters worse, by 2034, the US public will hold 116% of GDP.
What are the serious implications of this? The Congressional Budget Office estimates that a $1 increase in the deficit would cost 33 cents in private investment, which would inevitably reduce economic growth and the wages of American workers in the long run.
In fact, the impact of soaring fiscal deficits can be demonstrated in another way.
According to the latest data released by the U.S. Department of the Treasury, in the first seven months of fiscal year 2024, the U.S. debt interest expense will be as high as $514 billion, while the U.S. defense spending will only be $498 billion and health insurance spending will be only $465 billion.
That is, as of now, the interest expense of US Treasury bonds has completely exceeded the expenditure on defense and health insurance.
What does this mean? For example, if you have to pay more money on a bank loan every month than you have to pay for all your living expenses, does that mean that your standard of living is going to be getting lower and lower?
Similarly, interest payments on U.S. Treasury bonds now exceed spending on defense and health insurance, which means that high debt has shaken America's foundational livelihoods.
For example, Maya Maquiñas, chairman of the U.S. Conscientious Federal Budget Committee, said in an interview that social security and health insurance in the United States are gradually going bankrupt.
In addition, some time ago, the Social Security Trust Fund for Pension and Survivors' Insurance also released a report.
According to the report, the U.S. Social Security and Medicare Trust Fund is expected to be depleted in 2033, when the U.S. federal government will only be able to pay 79% of the intended benefits, and based on an average monthly benefit of $1,907 through January 2024, a 21% cut would leave beneficiaries with only $1,506, or $401 per month and $4,812 per year.
What's more serious is that according to past statistics from the Congressional Budget Office, from 1974 to 2023, the United States Social Security Spending accounted for an average of 4.4% of the total federal expenditure in the United States, and at that time Medicare and debt interest expenses accounted for 2.1% each, but by 2034, the United States will account for 6%, 4.2% and 4.1% of the total federal expenditure, respectively.
In other words, the soaring debt has not only affected the lives of the American people, but also shaken the fundamentals of the American economy.
Without strong economic growth, the "load-bearing wall" of U.S. debt will break, and it is likely that U.S. debt will collapse.