Is US debt sustainable?
Seems like a lot of experts like Ray Dalio are concerned about the rising burden of debt.
To put is simple, the US deficit as a percentage of GDP has basically doubled in the last 2 years, interest rates are increasing (and will stay higher for longer), de-dollarisation of FX reserves is also happening. So this will probably force the US to have permanently higher interest rates to fund itself, there-bye further increasing the burden of debt on the economy. The only way to get out of such a spiral would be for the FED to come in and print money to buy those bonds but that would cause a currency depreciation.
Does the US really have to decrease its government deficit to avert this or is US debt sustainable, any opinions?
Some credit agencies, like Fitch, have also downgraded US government debt, which was basically unthinkable a few years back.
S&P downgraded US debt to AA+ from AAA in 2011. It has remained there for over ten years.
Bump.
You fishing for silver bananas all the time with these posts or what?
Hi man, no I am genuinely interested in this question, especially since it is a theme that we will probably hear a lot about in the months and years to come; because there's a lot of speculation as to what normal interest rates will looks like in the future after the inflation saga is over. The era of zero percent interest seems unlikely to happen again.
Relative to other countries the US is a lot healthier...
Good point, the US doesn't seem to be doing too bad at the moment relative to Europe or other countries for example all things considered. But the US has the 11th highest debt to GDP ratio in the world, behind countries like Venezuela, Greece, Soudan, Lebanon, Eritrea, Libya, & Italy. Like surely you can't just increase the debt to GDP ration infinitely, correct? It's gone from roughly 85% in 2010 to above 120% today. Or am I getting something wrong? Surely, the supply of debt needed to service can't keep growing without consequence?
Sobering truth is war can fix it
How so may I ask?
Perferendis nostrum quia sed sed. Et est et amet officia omnis nihil. Consequatur ipsam earum deserunt facilis natus doloribus laborum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...