VINACHEM

The excessive spending policies of the administration of US President Joe Biden could lead to a fiscal "train wreck" as soon as 2025, former World Bank President David Malpass warned in May, adding that ballooning government debt was draining global resources into a narrow set of US government priorities and beneficiaries.

Skyrocketing global public debt is set to reach $100 trillion by the end of this year, driven foremost by the US borrowing binge, a new analysis by the International Monetary Fund (IMF) has revealed. This staggering sum represents around 93% of global gross domestic product (GDP).

If the current trend of borrowing outpacing economic growth persists, debt is expected to approach 100% of GDP by 2030, the IMF warned in its Fiscal Monitor overview.

Further debt growth is anticipated in the US, Brazil, France, Italy, South Africa, and the UK, according to the report. Urging governments to clamp down on borrowing to rein in debt, the report stated:

“Waiting is risky: country experiences show that high debt can trigger adverse market reactions and constrains room for budgetary maneuver in the face of negative shocks.”

Modeling an “extreme adverse scenario,” the IMF found that the level of future debt could reach 115% of GDP in three years.

The report berated countries for showing little appetite to cut spending, pointing to gradually slowing inflation and falling interest rates as offering an “opportune time for rebuilding fiscal buffers.” It also cautioned that delaying fiscal adjustment plans would be “costly.”

US government debt currently stands at $35.68 trillion, with an analysis by the nonpartisan Committee for a Responsible Federal Budget indicating that it is only expected to grow amid “large structural deficits, surging interest payments, and the looming insolvency of critical trust fund programs.”

“Our large and growing national debt threatens to slow economic growth, boost interest rates and payments, weaken national security, constrain policy choices, and increase the risk of an eventual fiscal crisis,” it stated.

Former World Bank President David Malpass warned in May that the explosion of US government debt, which currently stands at $35.68 trillion, points to a looming “fiscal train wreck in 2025 when the debt limit is triggered, spending surges, and tax rates jump."

The US budget deficit during the Biden presidency has hit an all-time high at $6.6 trillion, Sputnik’s calculations based on data from the US Treasury Department showed in August. The US government's expenses during the 3.5 years under Biden exceeded revenues by $6.6 trillion — the highest in the entire history of these statistics.  – Source: Sputnik