The Debt Bomb Could Explode By 2034
Bubba
26 Sep
We might have an answer on when the national debt bomb will explode. (American Enterprise Institute)
A new AEI Economics study: American Enterprise Institute researchers estimate the sky-high U.S. national debt will become unsustainable once it hits 154% of GDP.
That’s just 30% higher than where debt levels currently sit.
Current projections indicate unsustainable debt levels will be reached by 2034.
What would happen: Should we reach this critical threshold, the U.S. would likely “face higher interest rates, difficulties in selling bonds, and financial instability” leading to inflation.
The U.S. would also lose the ability to keep government spending stable because higher debt servicing costs (like paying interest) would take up more of the budget, leaving less room for public services and investments, and making it even more difficult to reduce deficits.
Bubba’s Two Cents
It’s not exactly the sexiest topic, but you’d think the record-high $35 trillion national debt would play some role in the 2024 presidential race. So far it’s been pretty much radio silence from Kamala Harris and Donald Trump. Both candidates have seemed to emphasize policies that are likely to raise deficits, probably because such policies are pretty popular:
