US government debt is nearing a milestone. It will soon exceed $ 25 trillion.
US government debt continues to grow at an unprecedented rate. With the COVID-19 pandemic that is shaking the global economy, many nations have assumed massive debt burdens to cover them. The United States was no exception, and its debt has skyrocketed this year.
$ 25 trillion in debt
At the time of this writing, the United States is on the verge of $ 25 trillion in government debt. Debt per citizen is approximately $ 75,600 at the time of this writing. The debt-to-GDP ratio of the United States is currently 116%. For comparison: in 1980 it was only 34.5%. That is an astronomical increase.
As Mati Greenspan, founder of QE, wrote Twitter::
It remains to be seen whether this debt bubble will burst in the near future or not. However, it is now at a historical level that a few decades ago was considered impossible. Paradoxically, demand for the US dollar remains high, probably because we are in the midst of a deflationary crisis. When the dust settles, however, it can easily swing towards inflation.
Mati Greenspan recently said to BeInCrypto:
The pendulum can swing fairly quickly at times, especially in the extreme conditions we see now.
Increase in world debt
The current economic paradigm appears to depend on debt financing. Governments have generally accumulated more and more debt.
As reported by BeInCrypto in November 2019, global debt reached a record high of $ 250 trillion at that time. In January 2020, that number had increased by another $ 3 trillion. The economic consequences of COVID-19 will inevitably bring these already incredible debts to a higher level.
High debts are often linked to inflation. In fact, the number of dollars in circulation has exploded since the Great Recession. As reported by BeInCrypto in February, the money supply has doubled since 2008.
Fortunately, while we would have been held hostage to this debt decades ago, there are now alternatives to Fiat. As Andreas Antonopoulos BeInCrypto said in an exclusive interview, the monopoly currency system died on “January 3rd, 2009”. We no longer have to be tied to the dollar.
It is unclear how these unsustainable debts may be resolved. The United States is currently in a strong position as the world’s leading economy. However, as soon as cracks appear, the situation can easily get out of control. An economy dominated by debt is never sustainable and we are now at a historically high level without a clear way back.
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