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 is rapidly becoming a race towards a precarious precipice, with politicians pressing ever onward despite the mounting deficit. Despite the federal deficit equating to roughly 6% of GDP, President Donald Trump does not seem inclined to step on the brakes. A public debt crisis typically manifests when a country's debt reaches a historically high level, yet remains relatively stable due to low interest rates.
Should these rates begin to surge, a crisis can swiftly ensue. The catalyst could stem from global forces, a change in administration, or the fading memory of past financial upheavals. Presently, the U.S. seems to be at this critical juncture. Rising borrowing costs would be less daunting if the government had managed to secure low-cost, long-term financing.
However, this has not been the case. In contrast, homeowners continue to reap the benefits of low interest rates, enjoying reduced mortgage payments.
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
