News & Insights | Textile Industry

The U.S. debt has skyrocketed to $35 trillion.

Published: September 9, 2024
Author: TEXTILE VALUE CHAIN

It is common to overlook this issue, particularly in election years. A future rate reduction by the Federal Reserve could provide short-term respite by bringing down the cost of borrowing for individuals and companies as well as the government’s debt servicing expenses.But the basic issue still exists: since 2002, the United States has consistently had budget deficits because it spends more money than it brings in. Lower rates won’t make this better.The COVID-19 response has contributed to the nation’s debt explosion.

Due to market fears, the yield on the 10-year Treasury reached 5% in October of last year. The Congressional Budget Office issues a warning, stating that public debt might reach 166% of GDP by 2054 and that private investor debt could increase to 93.7% of GDP in less than ten years. This arrangement cannot continue, even in the face of strong demand for fresh loans. A financial crisis could be brought on by a decline in investor confidence.

In the past, deficit spending has assisted in keeping the economy stable during times of crisis, but current high levels of deficit expenditure raise questions about the ability to respond to future crises. If the US doesn’t solve its debt issue, it could find itself in a situation akin to the UK’s under Liz Truss.Increasing debt also poses a risk to the dollar’s value, which would lead investors to look for alternatives like Bitcoin and other currencies.

It’s obvious that budgetary reform is critically needed. Without it, there might be a worldwide financial catastrophe that affects the United States. Everyone is impacted by the $35 trillion debt issue, and in order to prevent it from getting worse, urgent action is required.

Related Posts

Compressed Air Solutions are unveiled by ELGi at Hannover Messe 2023.