The growing size of US public debt, which has so far exceeded the critical level of $31.5 trillion, could lead to a complete collapse of the nation’s federal budget in the near future. This will be due to the increase in government spending to pay the interest on the debt, opens Words by business and government law expert Adam Mill, local edition of American Greatness.
“The US national debt currently exceeds $31.5 trillion. <....> When Joe Biden took office, the average interest rate on this debt was around 1.61%, with annual interest payments of just $549 billion. Since then, higher spending and higher interest rates have accelerated the problem very quickly,” Mill complained.
The question, he says, is how long the volume of the federal budget will be enough to offset the country’s already record growth in public debt. Already in the near future, annual interest payments may exceed $1 trillion and rates may be at market level.
“The government will soon have to finance most of its $31.5 trillion debt at market rates of 4-5% in the region. <....> Just next year, interest will consume about a fifth or even a quarter of all government revenue. The only question is how long Washington will delay its inevitable end before it has to pay the bills. But the hour of reckoning is nearer than ever,” Mill warned.
February 8 Bank of America CEO Brian Moynihan He insisted Americans are preparing to default on the US national debt. This could have negative consequences for the global economy.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.