The US federal debt has reached unprecedented levels, surpassing $33 trillion, which represents 129% of the American GDP. Interest payments on this debt hit an astounding $659 billion this fiscal year, more than twice the entire GDP of the Czech Republic.
Under the leadership of the Democrats and President Joe Biden, the US government's indebtedness, which has almost doubled in the last two years, is becoming alarming. Some Republicans and economists warn that such debt levels are now unsustainable and could pose a threat to the stability of the world economy.
Another risk to fiscal imbalance is the higher benchmark interest rates set by the Federal Reserve (Fed), which are currently at their highest in 22 years, ranging from 5.25 to 5.50 percent.
Interest payments on the federal debt are nearing expenditures on defense and healthcare and could rank second in the US budget within three years, just behind spending on social and pension systems.
If the US government continues to face increasing costs to service its debt and cannot manage the situation, it might have to borrow even more money by issuing bonds to pay the interest. This could lead to financial instability affecting not only the US but also the global economy.
The possibility of the world facing a severe economic crisis, impacting people's lives worldwide, cannot be ruled out. It's crucial, therefore, for the US government and Congress to take necessary measures to avert a potential catastrophe.