Kunpeng Project
The burden on the U.S. national debt is increasing, and interest payments on the debt exceed this year's defense budget
Introduction: The huge debt of the United States has become a topic of global attention, and like the sword of Damolisk, it has the potential to bring a huge shock to the American economy at any time. The annual interest rate on U.S. Treasury bonds is expected to exceed the defense budget and account for a large share of future U.S. spending. Through the analysis of the growth of the U.S. debt scale, interest expense pressure, influencing factors and related areas, the debt problems faced by the U.S. and its potential economic risks are revealed.
U.S. debt continues to rise.
The U.S. national debt has been increasing and has now exceeded 34 trillion yuan, or 245 trillion yuan. The U.S. Treasury has to pay huge annual interest rates in addition to "borrowing new to pay for the old." There are reports that interest rates will outpace defense spending in future spending. Such a large interest rate expense reflects the growing debt situation of the United States.
1. Worries about the surge in debt.
The problem has been exacerbated by the surge in U.S. bond yields, which has led to a massive number of bond issuances in recent years. Rising borrowing costs mean more money for the U.S. treasury, and that money will take a long time. According to CBO estimates, the United States will have to repay another 1 over the next 10 years1 trillion debt, which shows the huge financial burden they face.
2. Interest expense is a big burden.
Due to the rapid growth of interest rates, the United States** must spend 870 billion, or 3 percent of GDP, over the next 10 years1% of money, this figure is double the average of recent years. This proportion is expected to reach 3. % of U.S. gross domestic product by 20349%, and interest rates are gradually becoming a key spending plan in the U.S. economy. Such a huge debt pressure has seriously affected the financial and economic stability of the United States.
Analysis of impact factors.
There is not only one reason for the surge in US Treasuries. The impact of the epidemic and the constant rise in Treasury yields have put US finances under more pressure. At the same time, experts have mixed opinions on the issue of liabilities, which makes people doubt the prospects.
1. Epidemics and newly increased liabilities.
The outbreak has shown the vulnerability of the United States** in the face of this crisis, with massive economic stimulus packages and emergency aid leading to a sharp rise in newly added debt. Such liabilities not only finance the current crisis, but also create potential risks for future interest rate increases.
2. The size of the debt and the interest rate.
Previously, the Federal Reserve raised interest rates several times, causing the United States** to take on more debt, causing its interest rates to rise. The combination of the size of the debt and the interest rate will make the interest expense heavier and heavier in the future, and the treasury will have to pay a greater price for it.
Expert opinion and prospects.
Experts have their own opinions on U.S. borrowing and where it will go in the future. They argue that excessive debt will lead to economic slowdowns, financial market instability, and other problems, while there are concerns that in the United States, the fiscal deficit is gradually decreasing, which is a worrying problem.
1. Dr. Zhao's opinion.
Dr. Zhao believes that the U.S. debt is so large that it can't actually afford it. The increase in borrowing costs will lead to a sustained increase in state spending, which will adversely affect our economy and financial markets.
2. Money Manager's perspective.
He believes that an excessively large fiscal deficit will increase the interest rate on bank loans, inhibit economic development, and may cause a depreciation of real estate, which will have an impact on the overall economic system. The issue of indebtedness is an issue that cannot be ignored and it is also an issue that requires full attention.
The conclusion is that the huge debt and high interest expenses of the United States have become a "sharp blade" that has damaged the American economy. Although the state can obtain financial support through the issuance of bonds, its high interest rate burden cannot be ignored. The pandemic and rising Treasury yields, among other reasons, have exacerbated the U.S. debt situation, and some academics are increasingly worried about the future direction of the economy. In order to prevent the United States from falling into a deep debt predicament and ensure its long-term and healthy development, it is necessary to adopt a cautious attitude and strengthen structural adjustment so that it can get out of the "debt" predicament.