2024-04-04 17:59:15
Bloomberg conducted a million simulations of forecasting the prospects for US debt, which showed that borrowing is on an unsustainable path, Day.Az reports with reference to Prime.
The agency’s material notes that the US Congressional Budget Office in its recent forecasts warned that the US national debt from 97% of GDP in 2023 will reach 116% by 2034, which is even more than during World War II.
At the same time, actual forecasts, according to Bloomberg, may be even worse, given the “rosy” assumptions. The agency ran a million simulations to assess the fragility of the debt outlook, and in 88% of cases, the simulation results showed the debt-to-GDP ratio to be on an unsustainable trajectory.
It is noted that the Biden administration claims fiscal sustainability and manageable debt servicing costs. But implementing the plan will require action from the US Congress, which is deeply divided along partisan lines.
Bloomberg reports that the long-term outlook is troubling. That said, confidence in US Treasury debt could be a tipping point.