The Global Debt Crisis: The U.S. Debt Problem and the Global Economy
As we all know, the current US debt problem is a major hidden danger in the global economy. Judging from the current pace of U.S. bond issuance, there is a risk of lightning explosions in the future. However, this is not a problem alone in the United States, and many economies around the world are also issuing debt to keep themselves afloat. According to data released by relevant institutions, the total global debt has exceeded $300 trillion, which far exceeds the current total of global GDP.
It is worth noting that developed countries issue a relatively large share of the world's total debt, which is determined by their own economic systems. If you ask everyone who is the country with the highest debt ratio in the world, some people will immediately think of the United States. But in fact, although the United States has a large total debt, the debt ratio is not the highest, and this honor is taken away by Japan.
Japan's debt situation had had a serious impact on its economic development, with its debt equivalent to 250 per cent of gross national product. According to the forecasts of relevant institutions, if Japan does not improve in the future and remains sluggish for a long time, its debt ratio will rise further. Although the United States has the largest total debt, its debt ratio is not high, at 140%. Especially after the global outbreak of the epidemic in 2020, the speed of US bond issuance has increased significantly.
At that time, the U.S. government's thinking was very simple: in the event of an economic recession under the pandemic, the only way to stimulate economic growth was to issue debt. However, even now, the US economy shows no signs of improving. To make matters worse, they have yet to find a proven way to improve the situation. It is foreseeable that the US economic growth rate is likely to remain at current levels for some time to come.
The scale of the US debt is already a drag on its economy. At present, the United States is not only in a state of borrowing new to pay off the old, but also paying a lot of interest. It is estimated that by 2023, the United States will need to pay $1 trillion in interest. This is one of the main reasons why many institutions and economies around the world sold off U.S. debt. Everyone is worried about a default on the US debt, which will have a significant impact on the global economy.
At the same time, we also need to pay attention to the fact that a large amount of debt in the United States will mature next year, amounting to $7 trillion. According to reports, the current US government's solution to this problem can only be to pay off the previous debt by borrowing again. However, this approach will lead to a snowball of problems that will surely one day be unsustainable.
In general, the US debt problem has become a major challenge for the global economy, and this problem is a hidden danger brought by the US dollar hegemony harvesting the world, how should we protect ourselves under the tide of the times? You are welcome to leave your thoughts