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.

Blind Man’s Shutdown

Congress is playing the equivalent of Bind Man's Bluff. With the shout “tag your it” they seek to blame the other party for the government shutdown.

A Reluctant Acknowledgment: What Conservatives Can Admire in Everyday Progressives

Admirable ideological qualities seen in liberals and left-wing individuals are those of the everyday believer not their political leadership.

Ensuring Domestic Tranquility

The Supremacy Clause in Article VI of the U.S. Constitution establishes it as the highest law of the land, taking precedence over conflicting state laws.

Pam Bondi, Zohran Mamdani, and the ADL: Censorious Peas in a Pod

Typically, the only four circumstances under which the leadership...

Shut it Down – Shut it Down

Shut down and dismantle every federal agency not essential to citizens' life, health, or liberty — phase them out and end their power. permanently!

Trump Weighs on Cutting Agencies as Government Shutdown Enters Day 2

Trump to meet with OMB Dir. Vought to decide which agencies face cuts and whether reductions will be temporary or permanent.

Is There a 9/11 WTC and 9/10 Charlie Kirk Connection?

Strange parallels in online stories raise questions about whether Israelis and Mossad intelligence are our allies or adversaries.

ACLU Sues ICE to Release Records of Detainment Facilities

ACLU has filed a lawsuit against ICE, seeking to compel the agency to disclose records related to specific operations, according to the complaint.

Pam Bondi, Zohran Mamdani, and the ADL: Censorious Peas in a Pod

Typically, the only four circumstances under which the leadership...

Department of Energy Cancels $7.5 Billion in Project Funding

The Dept of Energy (DOE) said on Oct. 2 that it had terminated 321 federal grants funding 223 projects, amounting to about $7.56 billion in cuts.

White House Withdraws EJ Antoni’s Nomination to Lead Bureau of Labor Statistics

The White House has withdrawn economist EJ Antoni’s nomination to lead the Bureau of Labor Statistics, the White House confirmed on Sept. 30.

US to Impose 100 Percent Tariffs on Foreign-Made Movies, Trump Says

President Donald Trump announced on Sept. 29 that he will impose a 100 percent tariff on all movies produced outside the United States.

Trump to Host Netanyahu at White House to Discuss Gaza Peace Plan

President Trump will host Israeli Prime Minister Netanyahu at the White House on Sept. 29 to discuss a ceasefire and broader peace plan for Gaza.
spot_img

Related Articles

Popular Categories

MAGA Business Central