US national debt on the rise with no end in sight
2 Min Read
The debt of the world's richest economy continues to rise, as the stakes get higher.
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US Capitol as dark skies recede following blustery weather, Friday, Feb. 21, 2014, in Washington (AP)
The United States' national debt keeps ballooning and its economy crumbling with forecasts of a recession not over just yet.
During the COVID-19 pandemic, the US national debt saw a major spike but was not controlled until it recently skyrocketed to over $34 trillion, hitting a historic high.
This poses a problem that will spill over to other big economies relying on public borrowing to regulate inflation. Moreover, it leaves public services provided by the US government, such as Medicare and Social Security, in an unknown grey area as the government could be faced with choices to prioritize certain services over others.
The issue could also peak with the consideration of the debt ceiling plan proposed by US President Joe Biden. It essentially raises the debt ceiling till January 25 to avoid a complete breakdown of the economy, but there are no financial guarantees in a very dynamic economy.
It is worth noting that the US national debt soared from an inflation-adjusted $403 billion to $34 trillion in just a century.
Currently, the US debt-to-GDP ratio stands at 123%, according to the International Monetary Fund. It surged over China's debt-to-GDP ratio, which recently leveled at over 80%. Japan, on the other hand, scored the highest among big economies and currently stands at 255%.
US national debt: 2024's biggest threat
In a related context, a survey revealed that American CEOs consider the US' inflating national debt as the most worrisome geopolitical risk that could affect their business, rather than wars in the Middle East and Ukraine.
The survey taken by CEOs and C-Suite executives, called The Conference Board’s C-Suite Outlook 2024, also indicated that the second risk businesspeople are unsettled by are cyberattacks that could infiltrate their databases and systems.
Ranking third was the war on Gaza and the possible regional expansion, followed by the influx of energy prices resulting from the war in Ukraine.
Read more: US support of Israeli war on Gaza risks EU energy security, economies
