America's looming debt reckoning
CAMBRIDGE — America’s fiscal position is increasingly looking like a train hurtling along a twisting mountain track. No one seems willing to slow down for fear of falling behind schedule and losing their job. Even if the train doesn’t crash, it is worth asking: Why keep pushing it? Despite solid growth, the federal deficit is about 6 percent of GDP. Yet the option of slowing down does not appear…
America's fiscal situation resembles a train careening down a winding mountain pass, with no signs of slowing down due to the fear of missing deadlines or job losses. Even though the nation's solid growth has kept the federal deficit around 6 percent of GDP, President Donald Trump appears unwilling to ease the pace. The onset of a public-debt crisis typically follows a predictable pattern: high debt levels that have been manageable due to low interest rates.
However, the trigger for the crisis is less predictable and can arise from global factors, a change in government, or a fading memory of past financial crises. Currently, the United States finds itself in a precarious position. Rising borrowing costs would be less significant if the government had secured affordable long-term financing, but that hasn't happened.
Homeowners, on the other hand, have benefited from low-cost borrowing and continue to enjoy these favorable conditions.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- America's looming debt reckoning koreatimes.co.kr
