The US debt situation looks ‘unsustainable,’ and corporate defaults are rising, IMF warns

Contact Your Elected Officials
Markets Insider
  • The US’s $33 trillion debt pile is reflecting “unsustainable” fiscal policy, the IMF said.
  • The government has already racked up a $1.5 trillion deficit in the first 11 months of 2023.
  • “Under unchanged policies, debt dynamics in the US are very unfavorable,” the IMF warned.

The US debt situation is looking increasingly precarious, and corporate defaults are up as interest rates stay high, according to the International Monetary Fund.

The US’s fiscal situation is the “most worrying” among all world countries, the IMF’s research director Pierre-Olivier Gourinchas said in a press briefing on Tuesday.

That’s largely due to the rapid pace of government spending, with the US already having racked up a $1.5 trillion deficit in the first 11 months of the fiscal year, according to a recent Brookings Institution estimate.

And in an interview with Bloomberg on Wednesday, IMF Fiscal Affairs director Vitor Gaspar also said US deficits are elevated and look to be persistent.

“Under unchanged policies, debt dynamics in the US are very unfavorable,” he said, later adding that the “the perpetuation of current policies entails an unsustainable fiscal path.”

The total federal debt blew past $33 trillion for the first time ever this year. That amounts to around 121% of 2022’s GDP, but that is projected to blow up in the coming years, with the added risk that the US could default on its debt in as soon as 20 years, Penn Wharton School researchers warned.

That future spells trouble in the backdrop of rising interest rates, with rates now at their highest level since 2001 as the Fed keeps a hawkish eye on inflation. That could raise the borrowing costs on US debt to a new record by 2025, Goldman Sachs strategists said.

Higher rates are also bound to spark some distress for borrowers, with over $2 trillion of corporate debt set to mature in the US alone in 2024.

By Jennifer Sor

Read Full Article on Markets.Business.Insider.com

The Thinking Conservative
The Thinking Conservativehttps://www.thethinkingconservative.com/
The goal of THE THINKING CONSERVATIVE is to help us educate ourselves on conservative topics of importance to our freedom and our pursuit of happiness. We do this by sharing conservative opinions on all kinds of subjects, from all types of people, and all kinds of media, in a way that will challenge our perceptions and help us to make educated choices.

Tylenol’s Headache

When President Trump, RFK Jr., and Dr. Mehmet Oz called for pregnant women to avoid using acetaminophen, Tylenol got the headache.

American Restaurants Are Going Broke

U.S. restaurant bankruptcies surged to 22% in 2020 amid COVID-19 and stayed elevated at 14% last year due to Biden’s “Build Back Better” policy.

A Few Fun Alternatives to the”Gory Stuff” at Halloween

Halloween has gone off the rails with gore through the decades.  But there are ways to enjoy the "scary stuff" without giving into darker, pagan alliances.  

Germany Stands To Lose & Poland To Gain From The EU’s Latest Energy Move

The US is geostrategically re-engineering Europe at Germany’s expense in order to facilitate Russia’s post-Ukraine containment.

EBT Serfs Threaten Violent Mass-Shoplifting Spree if Food Stamps Cut

The EBT serfs of the underclass may be in for a rough ride come November, when mommy government is slated to wean them off the teat of state.

White House Releases Donor List for $300 Million Ballroom Project

The Trump admin has released a list of the private donors contributing funds to the new ballroom being constructed on the White House grounds.

Alleged Chinese Fentanyl Kingpin Recaptured in Cuba Following Mexico Escape

A Chinese fugitive wanted on suspicion of trafficking huge quantities of fentanyl and cocaine into the United States has been recaptured in Cuba.

Walmart Brings Back Thanksgiving Basket, Turkey at Lowest Price Since 2019

Walmart brings back its popular Thanksgiving Basket meal, offering turkey and fixings to feed 10 people for under $4 each.

Prominent Personalities Sign Letter Seeking Ban on ‘Development of Superintelligence’

Hundreds of people, from conservative commentators to tech executives, have signed a letter seeking a ban on “the development of superintelligence.”

Trump Pardons Convicted Binance Founder Changpeng Zhao, White House Confirms

Trump pardoned Binance founder Changpeng Zhao, convicted of money laundering two years ago while leading the global cryptocurrency exchange.

Trump Calls off Meeting With Putin, White House Says

White House says Secretary Rubio and Russia’s Lavrov had a productive call; no further meetings or Trump-Putin talks are planned soon.

President Signs Rare Earth Agreement With Australia’s PM

President Trump hosted Australian PM Albanese at the White House, where both leaders signed a new agreement on rare earth mineral cooperation.

Trump Says Insurrection Act Is ‘Strongest Power a President Has’

President Trump detailed plans to invoke the Insurrection Act to address rampant crime, calling it the “strongest power a president has.”
spot_img

Related Articles

Popular Categories

MAGA Business Central