Government Debt Nears 100%

government debt oct 2020

The United States government is projected to be 98% in debt by the end of this year according to the Congressional Budget Office. Next year, government debt will reach its highest level in history, they say, at 107% of Gross Domestic Production (GDP). Debt will then continue to grow to 195% of GDP in 2050 if taxes and spending as well as borrowing remain unchanged. Just interest payments are set to overtake non health and social security related mandatory spending by the end of the decade. Payments on the huge borrowed capital of $27 trillion is not even being envisioned, with costs to rise significantly if interest rates increase due to higher inflation. “High and rising federal debt makes the economy more vulnerable to rising interest rates and, depending on how that debt is financed, rising inflation,” they say, adding: “The growing debt burden also raises borrowing costs, slowing the…

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