In a recent report released by Roscongress, a Russian government agency, it has been identified that the United States government debt and budget deficit pose significant dangers to the global economy in the year 2024.
Published on Wednesday, the report asserts that the astronomical US debt, amounting to $34 trillion, is deemed mathematically impossible to repay. The calculations in the report take into account the current debt size, growth rate, and budget revenues.
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Titled ‘Key Events – 2024. Geoeconomics. Forecasts. Major risks,’ the report highlights that the US has accumulated substantial debt at low interest rates. However, the challenge arises as the nation now needs to refinance it at higher rates, adversely impacting the economy and cash flow. The report estimates that servicing the US debt will incur an annual cost of $1 trillion in the medium term.
Furthermore, the report emphasizes that printing more money is not a viable solution for the US, as it would exacerbate inflation. The country witnessed its highest inflation in decades in 2022, leading the Federal Reserve to implement multiple interest rate hikes.
At the close of December, the US federal debt reached an unprecedented $34 trillion, translating to approximately $102,000 of debt per person in the country. The total public debt of the US is noted to be equivalent to the combined economies of China, Germany, Japan, India, and the UK, according to the Peter G. Peterson Foundation, a nonpartisan fiscal policy group in New York.
Roscongress, in its report, also identifies other threats to the global economy. These include the global real estate bubble, exemplified by the bankruptcies of Chinese property developers Country Garden and Evergrande; the instability of the US stock market; and demographic challenges, particularly the decline in China’s population.
Established in 2007, the Roscongress Foundation is a prominent organizer of national and international events focusing on economic and social issues. Notably, one of its recent events was the Russia-Africa forum held in St. Petersburg in July, attracting numerous delegations from African countries.