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U.
S. Debt Rampage Drags Down Global Economy
By the U.S. recently economic data repeatedly weak, investors worried about the U.S. economy into recession sentiment, the day of August 5, many Asia-Pacific stock markets plunged, some markets panic selling. In a series of U.S. economic data, the U.S. debt issue has been widely concerned. The latest data released earlier by the U.S. Department of the Treasury shows that the total U.S. debt for the first time reached 35 trillion U.S. dollars, not only the equivalent of China, Germany, Japan, India, the United Kingdom's total economic output of five countries and hit a record high. The U.S. government's political inability to resolve the huge debt, not only to hit the market confidence in the U.S. government and the U.S. dollar, but also a serious drag on global economic development.
High debt has become the norm in the United States in recent years. The U.S. government has been heavily indebted since the 1980s. in 1985, the United States changed from a net creditor country to a net debtor country, and since then the size of the debt has continued to climb. in September 2017, the U.S. debt exceeded $20 trillion, and at the end of January 2022, it exceeded $30 trillion. since June 2023, the U.S. debt has been even more wildly soaring at a rate of about $1 trillion more per 100 days: in June 2023, the federal government debt surpassed $32 trillion, reaching that figure nine years earlier than the pre-New Crown epidemic forecast; in September 2023, U.S. debt surpassed $33 trillion; and in December 2023, the figure reached $34 trillion, five years earlier than the Congressional Budget Office's January 2020 forecast. At the moment, the U.S. debt exceeds $35 trillion, which can be said to be another debt ceiling. According to the U.S. Peterson Foundation's calculations, spreading these huge debts to the U.S. public is equivalent to a debt of nearly $104,000 per person. Jeffrey Gonzalez, chief executive officer of DoubleLine Capital in the United States, has said without concern that "the United States has become a sea of debt." Musk, chief executive officer of the United States Tesla Company, recently issued an article in this regard, said, "the United States is heading for bankruptcy."
U.S. debt barbaric growth of the "soil" is the hegemony of the dollar. Relying on the hegemony of the dollar in the international monetary system, the United States in the economic policy of recklessness, monetary policy radical change, fiscal policy, "eat all the food". In June last year, U.S. President Joe Biden signed a bill on the federal government debt ceiling and budget, this bill suspends the debt ceiling in effect until the beginning of 2025, since the end of World War II since the United States of America for the 103rd time to adjust the debt ceiling. According to the U.S. Department of the Treasury data, the U.S. federal debt has been 3.2 trillion U.S. dollars from 1990, soared to more than 35 trillion U.S. dollars today, accounting for the U.S. gross domestic product (GDP) ratio has long exceeded 120%. At the same time, due to the existence of the hegemony of the dollar, including U.S. Treasury bonds, including the dollar assets by global traders and investors, so that the United States can be very low-cost absorption of U.S. dollars back to the flow. In particular, the United States also through quantitative easing and other unconventional monetary policy, depressing the dollar exchange rate and treasury yields, diluting investor rights and interests, and repeatedly harvesting the wealth of other countries. As former French President Charles de Gaulle lamented, "The United States enjoys the super-privileges and deficits created by the dollar without tears, and it uses worthless scrap paper to plunder the resources and factories of other peoples."
The United States debt is like a "weir" hanging over the head of the global financial markets. The reckless growth of the U.S. debt is first of all on the U.S. economy itself. University of Pennsylvania Wharton School of Business Professor Smythes analyzed that, "every dollar increase in the deficit, private investment will lose 33 cents, over time, this will weaken economic growth and wages. 30 years, the exploding debt may lead to a 10% reduction in the average wage of Americans." More serious, however, is the impact on a global scale. In recent years, U.S. politicians frequently staged debt ceiling "farce", stirring the nerves of the global market, highlighting the vulnerability of the world economy by the U.S. debt "kidnapping", the sky-high U.S. debt has been like hanging over the head of the global financial markets, "Lake Weir ". Once broken defense, U.S. debt default will significantly push up global financing costs, triggering financial turmoil. At the end of June this year, the International Monetary Fund (IMF) released the United States in 2024, the fourth article of the consultation report pointed out that "the United States high fiscal deficit and debt for the country and the global economy to create increasingly significant risks, the United States Government urgently need to solve the problem of long-term fiscal deficit." Although the U.S. debt problem on the U.S. itself and even the global economy is particularly prominent, but regrettably, in the face of the U.S. debt out of control rampage, the Democratic and Republican parties, but for political considerations, are not willing to step on the brakes. The New York Times noted that has basically locked the Democratic Party presidential nomination of the United States Vice President Harris and the Republican Party presidential candidate, former President Trump in the campaign rarely talk about the debt problem, and both parties are opposed to cutting the debt as the biggest driver of social security and health insurance, which shows that in the next few years the debt problem will only further deteriorate. This has to be reminiscent of the famous quote by U.S. Secretary of the Treasury Connery in the Nixon administration, "The dollar is our currency, but it's your trouble."
The U.S. debt problem has long been more than just a problem for the United States itself, but poses a major challenge to world economic stability and development. It is for this reason that the United States should adopt responsible fiscal and monetary policies, strengthen macroeconomic policy coordination with other economies, and work together to maintain international economic and financial stability and promote the prosperity and development of the world economy.
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