An erratic tariff policy, long-term payment obligations, rising interest costs - the USA is becoming increasingly indebted. Experts are worried: "We are really putting our economy and the future of our country at risk."
The US national debt has risen to over 40 trillion dollars (34.3 trillion euros) for the first time. The Treasury Department in Washington published corresponding figures. Accordingly, the total outstanding national debt amounted to $40.05 trillion.
This meant that national debt rose higher than previously forecast by the government and experts. According to experts, the reasons for this are, among other things, US President Donald Trump's customs policy, long-term payment obligations in the areas of social security and health care, and rising interest costs.
"If we continue as we are, we will be at $50 trillion in just six years. If you look back, less than ten years ago we were at $20 trillion," US broadcaster CNN quoted Michael Peterson, CEO of the Peter G. Peterson Foundation, an organization that monitors budget policy. “We are really putting our economy and the future of our country at risk.”
As CNN reports, it was predicted in May 2023 that the USA would not exceed this threshold until the 2028 fiscal year. The level of debt and the speed at which it is rising are giving experts cause for concern.
Last year alone, the US national debt rose by $3 trillion. As the “Financial Times” writes, this was the fastest growth outside of the pandemic period. "This is kind of like a giant, flashing 'check engine' warning light," Marc Goldwein, of the think tank Committee for a Responsible Federal Budget, told the newspaper. "It doesn't mean your engine is going to burn out tomorrow, but it's a clear sign that things have gotten pretty out of control. And it's not just about the scale, but also the speed at which we got to this point."
Economist: Taking on debt is significantly more expensive
The economist Gabriel Felbermayr warned of rising yields on the bond markets. “You have to worry about the stability of the global bond markets,” said the member of the Economic Advisory Council. Incurring debt is now significantly more expensive everywhere. "But that's not all: the risk of a major global sovereign debt crisis is currently very high."
"The USA is particularly vulnerable because here - unlike in Japan or the Eurozone - it is not just the state that is massively and increasingly in debt," said the economist. The corporate sector - not least because of debt-financed AI investments - and private households would also be in deep trouble. The total gross foreign debt of the USA now accounts for around 200 percent of economic output. “There are no signs of improvement in this situation, quite the opposite,” said Felbermayr. “Therefore, market participants expect higher inflation and an upward shift in the yield curve.”
US President Trump has long been putting pressure on the US Federal Reserve to lower interest rates. On Wednesday he demanded that interest rates "should be allowed to fall in light of our country's success and not rise because of that success." However, it remained unclear which successes Trump was referring to. According to experts, the relatively high inflation in the USA, which stands in the way of an interest rate cut, is due, among other things, to the war against Iran started by Trump and Israel. However, lower interest rates would, among other things, ensure that the USA would have lower borrowing costs for its very high national debt.
