Rs 3200000000000000: This huge amount is giving US president Trump sleepless nights, he is now begging before China due to...
Rs 3200000000000000: This huge amount is giving US president Trump sleepless nights, he is now begging before China due to...
Difficult days are ahead for Prsident Donald Trump as US's national debt has crossed $37 trillion (about Rs 32 lakh billion). This has rung alarm bells in the financial and policy world. The cost of paying interest on the debt is reaching about $1 trillion every year. This level can soon cripple the federal budget. It can stop the essential work of the government. As of June 20, the US government owes more than the country's entire economy in a year.
The Congressional Budget Office (CBO) estimates that if there is no major reform, the debt will reach 156% of GDP by 2055. Currently, an annual deficit of $2 trillion is increasing the debt. This is happening due to increased spending and slow growth in revenue.
The biggest threat is the interest bill. About a quarter of the federal tax income is now being spent on repaying the debt. This means that less money will be left for programs like Social Security, Medicare, national defense and infrastructure. Millions of Americans depend on these programs.
The debt of $37 trillion is a matter of great concern for US in many ways. It affects US's economic policies and global relations. It is also considered to be the reason behind Donald Trump's softening of tone against China in the trade war.
This loan can create many problems
Budget cuts aren't the only threats. Economists say this debt route could reduce private investment, raise borrowing costs and hamper economic growth.
The CBO estimates that if the debt is not brought under control, GDP could be reduced by $340 billion over the next decade, it could lose 1.2 million jobs and slow wage growth. Raising interest rates would worsen the damage. As global lenders demand higher returns to finance the U.S. deficit, borrowing costs will rise for businesses, homeowners and the federal government.
Threat of financial crisis is increasing on US
The risk of a financial crisis is increasing. If investors lose faith in the government's ability to manage finances, there could be a sharp rise in interest rates or a collapse of the dollar. This could weaken economic stability. There could be global shocks.
However, the US economy is still growing. But its pace has slowed down considerably. This year GDP growth is estimated to be just 1.4%–1.6%. Unemployment is rising. Inflation is still above target. The margin for error is shrinking.
The old sayings of economists, business leaders and people like Elon Musk are now coming true. If America continues on this path, not only will future generations pay the price for it, but this crisis may come very soon.
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