On August 22 local time, The Washington Post reported that in the face of the public debt issue, which has surpassed the trillion-dollar mark and set a new record, the US federal government may have to take some measures that will cause public dissatisfaction to address it.
"As the national debt exceeds 40 trillion dollars, legislators may soon be forced to make some long-stalled decisions that will impact almost everyone in America." The report states: "The federal government has been running deficits year after year, with expenditures exceeding tax revenues. The annual fiscal deficit has driven up the total national debt—although the growth was slow at first, it has since accelerated rapidly. There are ongoing warnings that a final reckoning is inevitable in the future."
Reports emphasize that currently, 30-year US Treasury yields have exceeded 5.27%.
"Bond markets are sending signals that we must make choices that will damage economic growth. Adam Abbas, who manages $40 billion in bond assets for Oakmark Funds said: ‘We have two options before us: raise taxes or cut spending. No matter which option is chosen, the political response will always be unpopular, and it has never been popular. However, we must ultimately find a solution.’"
"My concern is that we are on the brink of what can be called a true "debt spiral" – i.e., interest expense growth rate exceeding economic growth rate." said Marc Goldwein, senior policy advisor at the nonpartisan organization "Committee for a Responsible Federal Budget" (CRFB).
The Washington Post reported that the United States currently pays approximately $1 trillion in interest on its national debt each year.
According to the Peterson Institute for International Economics (PIIE), if there are no reforms in government spending or tax policies, the total debt in the United States could reach $50 trillion within six years.
