U.S. public debt has become an increasingly hot topic in 2024 as major institutions estimated the nation is adding $1 trillion to its burden every 100 days.
Indeed, the borrowing rate of the Federal Government has skyrocketed in the wake of the COVID-19 pandemic and the associated stimuli with the debt growing to approximately $34 trillion by the end of 2023 – just over $100,000 per capita.
Finally, these developments prompted the International Monetary Fund (IMF) to issue an uncharacteristically stern rebuke to the United States.
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IMF warned that America’s exceptional performance compared to most other advanced economies is, at least in part, driven by an unsustainable fiscal policy. The organization concluded that ‘something will have to give.’
The economy is (not) doing fine
The rebuke comes as an increasing number of everyday Americans and financial institutions are dreading a looming crisis due to a string of worrying financial developments.
JPMorgan (NYSE: JPM) has, for example, recently warned that the danger of stagflation is far greater than most people realize, while certain influential investors, such as Robert Kiyosaki, the author of the best-selling personal finance book ‘Rich Dad Poor Dad’ has been doomsaying that a crisis the likes of which haven’t been in decades is coming for months.
Working Americans have also been voicing their dissatisfaction with the economy in a number of ways, including increasing criticism on social media and undertaking a massive nationwide unionization effort.
Seemingly paradoxically, the recessionary fears come as the major stock market indices are running close to their record highs – a fact that has led to wildly varying interpretations.
In fact, while some judge the current state of the stock market constitutes a major bubble, others believe that the economy is doing just fine.
Finally, some have also been watching the FED with a wary eye, given that another vector of uncertainty comes in the form of high interest rates and unstable inflation data. The uncertainty is not helped by the mixed signals coming from America’s central bank itself.
U.S. national debt set to continue rocketing
While the current state of the economy is a hotly debated topic – and the current levels of debt are worryingly high, forecasts estimate the burden will only become larger in the coming decade.
Official estimates place the U.S. debt in 2033 at approximately $44.7 trillion, while Finbold calculated that should the current pace be sustained – a highly unlikely scenario – the burden will rocket to $57 trillion by 2030.
