US government debt and Washington’s budget deficit present the biggest threats to the global economy this year, Russian government agency Roscongress has warned.
Washington’s $34 trillion burden is mathematically impossible to pay off, Roscongress has claimed in a report it published on Wednesday. The agency based its estimate on the current ratio between the size of the debt, the rate at which it is growing, and budget revenues.
“The excessive debt was accumulated at low rates but needs to be refinanced at high rates that limit economic activity and reduce cash flow. In the medium term, the servicing of US debt will cost $1 trillion a year,” reads the report, titled ‘Key Events – 2024. Geoeconomics. Forecasts. Major risks’.
The US government cannot solve the problem by restarting the printing press this year because that would lead to higher inflation, the report added. The country saw consumer prices shoot up to the highest levels in decades in 2022, prompting the Federal Reserve to embark on a series of rate hikes to tame inflation.
US government federal debt toped $34 trillion for the first time in history at the end of December. It now amounts to about $102,000 for every man, woman, and child in the country. US total public debt is roughly equivalent to the economies of China, Germany, Japan, India, and the UK combined, as pointed out by the Peter G. Peterson Foundation, a nonpartisan fiscal policy group in New York.