The world’s largest economy could be heading for a recession as the US federal £26 trillion debt will cause “enormous, international ramifications” on stock markets around the globe.
This is the first time in history the fed has seen this level of debt and an expert has warned that the US are in danger of “defaulting on its debt.”
Should the US default on their debt this will cause global ramifications as the US dollar is the world’s principle currency since 1945.
Andrew Sanders, Senior Lecturer in Politics and International Relations, De Montfort University, told Daily Express US: “The debt, as seen as a percentage of GDP, remains over 100% but it has dipped slightly since it was 134.8% back in 2020.
Where to make spending cuts is a big problem as the largest chunk of federal debt, and the largest part of government spending is social security.
Harder pushes to block the raising of the debt ceiling from within the House of Representatives might yet cause the US to default on its debt, which would have enormous, international, ramifications.
Sanders warned, “The federal debt is such a large figure that no ordinary US citizen can really comprehend that amount of money and on a day-to-day level it really doesn’t impact a lot of people in any way.
“It does, however, poll as something that people really care about – well over half of people in recent polls cite the importance of reducing the budget deficit as a key priority.
“It being a stronger issue among Republicans, both because Republican voters typically value conservative economic policies more highly and because the Republicans are framing this as an issue that is being caused by Biden.”
Treasury Secretary Janet Yellen previously told CNBC in an interview, “The president has proposed a series of measures that would reduce our deficits over time while investing in the economy, and this is something we need to do going forward.