American businessman Elon Musk has warned that the United States is at risk of bankruptcy and the inability to finance even basic services if it fails to tackle rising public debt.
Musk wrote in a post on the platform:x“If we don’t deal with the exponential growth of the national debt, there will be no money for anything, including basic services.”
According to the International Monetary Fund,the US government debt level will reach 121% of GDP by the end of 2024,and will reach 131.7% of GDP in 2029.
At the end of last November, the US Department of the Treasury reported that public debt had reached an all-time high, surpassing $36 trillion, according to the International Monetary Fund, by 2029, the level of US government debt would reach 131.7% of GDP. , and by 2032 it would exceed 140%. The International Monetary Fund has warned that this growth poses a threat to the American and global economies.
During the term of US president joe Biden, the national debt rose from 28 trillion in 2021 to the current record, which exceeds 36 trillion dollars.
The main reason for the accumulation of debt is the chronic deficit that the American state budget suffers from.
Source: Agencies
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How can policymakers and the public work together to effectively manage and reduce the national debt in the future?
Time.news Exclusive: The Future of america’s Economy – An Interview with Debt Expert Dr. jane Thompson
Considering recent alarming statements by Elon Musk regarding the U.S. national debt, we sit down with Dr.Jane Thompson, a renowned economist and debt policy expert, to discuss the current fiscal situation and its implications for the American economy.
Q: Dr.Thompson, Elon Musk recently warned that the U.S. is at risk of bankruptcy and failing to finance basic services due to rising public debt. How serious is this threat?
A: Musk’s warning is not unfounded.The U.S. national debt has skyrocketed to over $36 trillion,and it’s projected to reach 121% of GDP by the end of 2024 and 131.7% by 2029, according to the international Monetary Fund (IMF). Such levels of debt can indeed jeopardize essential services if left unaddressed. When debt grows faster than the economy, we risk entering a vicious cycle where funding for necessary programs could be severely compromised.
Q: What do you think are the main factors contributing to this high level of national debt?
A: The primary driver of this increasing debt is the chronic budget deficit faced by the federal government. Over the years, we’ve seen significant spending without corresponding revenue increases. The COVID-19 pandemic exacerbated this issue, leading to additional expenditures that have been funded thru borrowing rather than tax revenues. With the management’s policies and economic conditions, it’s clear that without substantial reform, our debt levels will continue to rise.
Q: you mentioned the need for substantial reform. What kinds of measures could be undertaken to address this growing debt?
A: There are several approaches that Congress and the administration could consider.First, we could look at revising tax policies to boost revenue, ensuring that corporations and higher-income individuals are contributing a fair share. Additionally,addressing entitlement programs—like Social Security and Medicare—through thoughtful reforms can definitely help stabilize spending. prioritizing economic growth strategies that stimulate job creation and investment can increase GDP, which in turn can help manage the debt-to-GDP ratio.
Q: How does this growing debt impact the average American?
A: The implications for the average American could be significant. As public debt escalates, we may see cuts to vital programs and services, including education, healthcare, and infrastructure, that are funded by federal budgets. Furthermore, higher debt levels can lead to increased interest rates, which affect everything from mortgages to loans, reducing disposable income and hindering economic mobility.
Q: What practical advice would you give to Americans who are concerned about the national debt and its implications?
A: Staying informed is crucial. Americans should engage in discussions about fiscal policies and hold their elected officials accountable for their decisions related to spending and debt management. Additionally, individuals should also focus on their personal financial health by managing their debts wisely and saving for the future. Understanding the broader economic environment can help Americans prepare for potential changes in government services and economic conditions.
Q: Lastly, what do you foresee for the U.S. economy if we fail to address these issues urgently?
A: If the U.S. fails to tackle the rising national debt, we could face a range of dire consequences: increased borrowing costs, reduced government services, and ultimately a scenario that could throw us into a recession. It’s imperative that we take proactive measures now to ensure the long-term fiscal health of the nation. The stakes are high, and thus the time for action is now.
In a landscape where public debt continues to rise, these insights from Dr. Thompson illuminate the magnitude of the issue and the pressing need for solutions designed to safeguard the American economy.