/ world today news/ American Congressman: For every American there is $100 thousand national debt
The US national debt is now $34 trillion – four trillion more than a year ago. Treasury Secretary Janet Yellen called the figure frightening. The head of the multinational bank “JP Morgan Chase” James Dimon generally predicts a disaster. How serious are the threats to the world economy and is there a way out of the situation?
Living beyond your means
In the United States, they are used to living on a grand scale. The budget has not been in surplus since 2000. In 2023 – minus 1.7 trillion, 6.3 percent of GDP. The deficit is covered by loans. Experts are very concerned.
“34 trillion is scary,” the finance minister admitted. To every American – 100 thousand, Congressman John James calculated. However, Janet Yellen believes that the situation is still under control. But Congress and the presidential administration must work to reduce the deficit as well as invest in the economy.
Former House Speaker Paul Ryan notes that the debt is snowballing and will lead to “the most predictable crisis” in the country’s history. James Dimon agrees, saying the U.S. is “heading toward a precipice.” “It’s still about ten years away, but we’re going 60 miles an hour toward it,” he told Fox News.
It will shake hard
As interest rates rise, loans, including government loans, become more expensive. There is a risk that the state will not pay its debts. According to various estimates, up to a third of the budget revenues are spent on servicing the state debt. Expenses are increasing, but there is not enough money in the treasury. It is necessary to either shrink or take out even more loans. Democrats won’t allow cuts to welfare payments and military conflicts, so the debt continues to grow.
Despite isolated cases of bond dumping, the United States has no trouble raising funds. Largely because the dollar remains a strong currency – it is used for trade and holding reserves. “As a result, the negative consequences of the large public debt, in particular inflation, are paid by holders of foreign dollars,” noted Dmitry Zhuravlev, scientific director of the Institute of Regional Issues.
US government bonds are still considered very reliable in global markets, says Bogdan Zvarich, an analyst. In addition, the risks and returns of other instruments denominated in dollars are calculated based on the current exchange rates of these securities. “If Washington has service problems due to the high share of dollar payments in world trade, the risks in many other instruments will increase, which will negatively affect lending around the world. This will lead to a slowdown or even a contraction of the world economy.” explains the expert.
Lender’s problem
A U.S. bankruptcy wouldn’t be good for anyone, but it’s unlikely to happen, economists say. Rather, restructuring is possible. “This is not so unusual. Just remember the history of deposits in Cyprus in 2013 or the revision of the terms of service of GKO (government short-term obligations) in Russia in 1998,” says Alexander Razuvaev, a member of the supervisory board. of the Guild of Financial Analysts and Risk Managers. As a last resort, the Americans will simply replace the current bonds with new ones. “They may try to reduce payments at the expense of undesirable countries. Washington can use the bond exchange rate as a lever for political pressure by announcing that it is offering the ‘good’ countries a bargain and considering some of the debts to be written off for the “bad guys,” he suggests.But they will try to delay even such a scenario as much as possible, experts say.
Given the potential dangers of investing in the US economy, analysts are increasingly offering the precious metal as an alternative. According to a report by the World Gold Council (WGC) last year, central banks broke the record set in 2000 in the first nine months and bought 800 tonnes. The leaders are China (181 tons) and Poland (105). SSZ has no doubts: against the backdrop of geopolitical tensions, demand will grow even more. As for de-dollarization, this process is long and difficult. The dollar system is so integrated into the world economy that Europe, Africa and Latin America will suffer much more from its collapse than the US, Zhuravlev emphasizes.
And Americans will be helped by reducing the costs of foreign conflicts and reducing welfare. Then the national debt will gradually decrease. “If it weren’t for its maintenance, the budget would be in surplus,” the expert explains. But internal contradictions will not allow the implementation of such a policy. Analysts agree that the US national debt will continue to grow.
Translation: V. Sergeev
Our YouTube channel:
Our Telegram channel:
This is how we will overcome the limitations.
Share on your profiles, with friends, in groups and on pages.
#bad #guys #rid #record #national #debt
