National debt exceeded GDP: the US economy found itself in a difficult situation

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By the end of March 2021, the US national debt exceeded the $ 28 trillion mark, which is 101% of the country's GDP. Washington faced a similar problem in 1946, immediately after World War II, when the national debt reached 106% of GDP and economy The United States found itself in a difficult position, writes the online edition InfoBRICS.

Since the 2008 financial crisis, the US national debt has grown at an unprecedented rate. Over the two cadences of Barack Obama, it has grown by $ 9 trillion. Under Donald Trump, another $ 7 trillion was added.



In 2018, the level of the American national debt reached 78% of the US GDP and the World Bank considered it dangerous. According to forecasts, the US national debt was to exceed the country's economy only in a decade. However, the COVID-19 pandemic has made its own adjustments. The country's government began to stimulate the economy by borrowing funds.

According to Lawrence Summers, ex-economist of the World Bank and the head of the US Treasury under President Bill Clinton, the stimulus measures turned out to be excessive and could harm the country either by uncontrolled inflation, or threaten a "dramatic clash" between fiscal and monetary policies... He called it the most reckless macroeconomic policy in four decades.

According to the forecast of the Federal Budget Commission, by 2025 the US national debt could amount to 117% of the country's GDP. But this does not yet bother investors and does not prevent the government from accumulating debt, since funds are now cheap. At the same time, the asset management department of JP Morgan claims that it is not the size of the state debt that matters, but the payment for its servicing. The bank's analysts noticed that the cost of servicing the state debt is now lower than 15-25 years ago, when its ratio to GDP was below 50%, and the government was dealing with a budget surplus.

If interest rates rise, the cost of servicing the public debt will rise from 1,3% to 3,2% of GDP. By 2028, the United States will be forced to use a fifth of the federal budget to cover interest on its national debt. The Fed will start buying back bonds to keep interest rates low. This could lead to the fact that investors lose confidence in the ability of the United States to repay the borrowed funds, they will start selling bonds and demanding an increase in interest rates.

This will have serious economic implications. The rise in interest rates will cause a decrease in the value of US Treasury securities and may result in a wave of bankruptcies, as well as a new financial crisis.
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15 comments
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  1. Afinogen
    Afinogen
    +3
    April 1 2021 09: 22
    When already request How long can you wait, the popcorn has already gone bad lol When this country is already, the fiend of hell will collapse and the whole world will breathe a sigh of relief. Grandma Wang predicted that America would crumble like dust and fall apart into several states.
    1. Fourth Horseman
      Fourth Horseman
      +4
      April 1 2021 10: 30
      A rally in support of Russian President Vladimir Putin was held in Alaska. Residents of the largest state in terms of area demand the return of the peninsula to Russia and consider it illegal to sell it to the United States in 1867. They appeal to the amendments to the Constitution of the Russian Federation, according to one of which it is forbidden to alienate the territory of the country in favor of another state.

      According to independent experts, about 300 thousand people gathered for the spontaneous rally, which is almost half of the peninsula's population. Those present are citing the Constitution of the Russian Federation and loudly chanting out loud the most famous statements of the Russian president.

      Washington has not yet commented on the events in Alaska. However, Ukrainian Foreign Minister Dmitry Kuleba and the heads of the foreign affairs agencies of Lithuania, Latvia and Estonia noted that any territorial claims against the United States are unacceptable.
      1. Alexndr p
        Alexndr p
        0
        April 1 2021 10: 54
        the panorama is the best. they need to expand their geography and release news in English
  2. Valery Bor
    Valery Bor
    +1
    April 1 2021 09: 51
    Well, Wanga said it for two ... As long as the dollar is tied to oil, and all interstate payments in this currency, the United States will not collapse and crumble anywhere. The dirty blood of the dollar circulates in the world financial (circulatory) system. We support her - we let this infectious blood flow through our veins as well. To cleanse and recover, you need to change your blood. Everyone. Will everyone want to?
    1. Afinogen
      Afinogen
      +2
      April 1 2021 10: 02
      Quote: Valery Bor
      Well, this is also Wang said for two ..

      I personally believe her. I think this hour will come.

      Quote: Valery Bor
      We support her - we let this infectious blood through our veins.

      Not we, but our oligarchs, officials and everyone who has large dollar accounts in foreign banks, they are not enemies to themselves, so they will do their best to support this rotten dollar even to the detriment of their own state.
    2. 123
      123
      +4
      April 1 2021 11: 08
      The dirty blood of the dollar circulates in the world financial (circulatory) system. We support her - we let this infectious blood through our veins. To cleanse and recover, you need to change your blood. Everyone. Will everyone want?

      It is more correct to pose the question - will they decide and can I? To do this, you need to have some knowledge of "medicine" and have "equipment". Gaddafi tried to self-medicate, veterinarians flew in ... The rest of the patients are still afraid.
      Russia knows how, the "dropper" is already in place, the process is underway. China seems to be setting up a large plasmapheresis apparatus, it will work, which means the process will go much faster. Patients will definitely catch up for the procedures. Now we need to carefully look after the "veterinarians", the volume of the circulatory system will decrease, their concentration of the poison will increase, toxicosis will begin, and it will hit the head. In general, orderlies with a straitjacket should be at the ready.
  3. Valery Bor
    Valery Bor
    +1
    April 1 2021 10: 06
    I personally believe her. I think this hour will come.

    Faith is the only thing that cannot be taken away from us.
  4. Sergey Latyshev
    Sergey Latyshev
    -4
    April 1 2021 10: 31
    Endless weekly theme - topped, about to collapse. Already and unfunny.
    USD 75,91 + 0,23
    1. Alexndr p
      Alexndr p
      +5
      April 1 2021 10: 55
      you are like an ATM. Keep us posted
    2. 123
      123
      +1
      April 1 2021 11: 11
      Endless weekly theme - topped, about to collapse. Already and unfunny.

      Do you think this is humor?
      What does the dollar exchange rate have to do with it? You still offer to look at capitalization laughing
  5. GRF
    GRF
    +1
    April 1 2021 11: 24
    GDP for which year?

    According to the forecast of the Federal Budget Commission, by 2025 the US national debt could be 117% of the country's GDP.

    What are the numbers being compared? What is the credibility?

    The game of percentage numbers is not always obvious, for example:
    100 kg of fresh mushrooms contained 99% water. After drying, they became 98% water. How much do mushrooms weigh now?
    Half as much, something like this ...

    After a few "maybe" the main thing is to confidently state:

    This will have serious economic implications.

    The United States - for the printed paper, receives valuable, real resources, someone's labor, someone's property, so there will be a "wave of bankruptcies ...", but not in the United States, but for those who remain with very "valuable" paper and only then, the US economy may find itself in a difficult situation. But I think the Americans will be able to convince someone to continue to accumulate her "wealth" in the future, though there will be not thousands and millions, but trillions, quadrillions, etc., and okay, the paper will definitely endure ...
    So while in pursuit of the accumulation of paper "wealth" there will be those who wish, tightening their belts, to give up their material values, America will have everything Oten Koloso ...
    1. Barmaley_2
      Barmaley_2
      -1
      April 1 2021 12: 11
      in fact, for 50 years ALL money in the world is FIAT! And they are NOT tied to a material equivalent - gold or other valuable things. Power and economic power of any state is the level of development of technology and society.
      The meaning is development. And the dollar and now the already exhaustive model of development no longer fulfill the functions originally devoted to them. The world has become global and there are almost NO (well, for example, the DPRK is a too small market) free markets for goods and services. Thus, the problem is NOT in dollar, and in the fall in the effective capital or in another way - the fall in capital productivity. But no one has a new model either! So this is all dancing with a tambourine and premature commemoration. Until there is an alternative - a new model of fin-in-ek- th development of the world system of division of labor.
    2. 123
      123
      +3
      April 1 2021 12: 29
      So while in pursuit of the accumulation of paper "wealth" there will be those who wish, tightening their belts, to give up their material values, America will have everything Oten Koloso ...

      But those who want to give away their material values, tightening their belts, are becoming less and less.
  6. Barmaley_2
    Barmaley_2
    +2
    April 1 2021 12: 30
    Look at the debt levels of countries like Japan or Italy. They have much more than the state. And at the same time, these countries DO NOT issue the world reserve currency. And from another country look at a country, for example, like the Russian Federation. It has virtually zero public debt. But this It does not give it anything in terms of the country's development. And the salaries of citizens and places in the world system of division of labor are incomparable in these countries. The Russian Federation is in a much more losing position. And the power and economic power of any state is the level of development of technologies and society, and not the number of candy wrappers in the treasury.
    The meaning is development. And the dollar and now already exhaustive that model of development simply does not fulfill the functions initially devoted to them. The world has become global and there are almost NO (well, for example, the DPRK is a too small market) free markets for goods and services. Thus, the problem is NOT in the dollar, but in the fall in the effective capital or in another way - the fall in capital productivity. But no one has a new model either! So this is all dancing with a tambourine and a premature commemoration of a dollar. Until there is an alternative, a new model of finance. -ec-th development of the world system of division of labor.
  7. Jacques sekavar
    Jacques sekavar
    +2
    April 1 2021 17: 57
    Every theorist predicts the collapse of the US economy, but for a decade these prophecies have been far from reality.
    Moreover, the quantitative easing program had an undeniable stimulating effect on the economy, and at the same time there was no inflation, and investments not only did not decrease, but grew.
    The state debt of the Russian Federation is about 18% and compared to the USA, Japan, China, it is minuscule, but the growth of the economy is at the level of statistical error and plus inflation. All this resembles a run on the spot, so you wonder who is pursuing a reckless macroeconomic policy, or does the Russian Federation have its own, special way of development according to its own economic laws that are different from the whole world?