Will Americans realize that unavailing war-mongering caused massive debt?
F.M. Shakil
Monday 29th of July 2024
Last year, US Treasury Secretary Janet Yellen stated that failure to extend the US debt ceiling could have disastrous repercussions.
The US national debt has reached an alarming $34 trillion mark, pushing the country's economic indicators down, with the value of the dollar declining, inflationary pressure increasing, and the policy rate soaring amid a realization that all is not well.
The US's involvement in various global disputes with the aim of not resolving any, and thus getting its adversaries entangled in a prolonged and endless quagmire has had a notable effect on its economy. Due to resource constraints, the social sector often struggles to provide for the welfare of underprivileged populations and fails.
The self-proclaimed superpower has spent tons of taxpayers' money on military endeavors in different regions of the globe, including Europe, Latin America, the Middle East, Asia, the Balkans, and Africa.
US administration feels the heat
There seems to be a consensus in the US official quarter that if this situation persists any longer and the debt-to-GDP ratio remains at 100%, it could have negative consequences for the country's financial stability, investor confidence, and dollar valuation, resulting in a chronic recession.
The House Committee on Financial Services echoed these concerns when US Treasury Secretary Janet Yellen briefed the House Committee early this month on the country's overborrowing and inflation issues.
She voiced concerns about the global trend of ditching the dollar in cross-border trade and warned that an impending economic collapse was brewing. Janet stated that the impact of Bitcoin and other cryptocurrencies, as well as the geopolitical narrative of de-dollarization, had a combined disruptive effect on the US debt burden.
Leading US banks, such as JPMorgan Chase, Wells Fargo, and Citi, have also expressed similar concerns about the dire state of the US banking industry, citing a major economic vulnerability characterized by a dramatic drop in deposits and an increase in loan risks.
Recent earnings results from these banks reveal an alarming reality: consumers are struggling due to persistent inflation and rising debt, which has forced banks to raise interest rates on savings accounts to draw in deposits. The results are evident: the lending market is unstable, earnings are decreasing, and charge-offs are rising sharply, all of which point to an impending financial disaster. The instability of the banking sector significantly impacts the overall economy.
Tesla's CEO, Elon Musk, questioned the viability of the US dollar in a string of tweets in March of this year, holding US officials responsible for mismanaging the nation's finances and economy. He said that overspending, exceeding credit limits, growing debt, and excessive currency printing will drive the country into deep economic turmoil.
The billionaire entrepreneur stated that the economic sanctions imposed by the United States on other countries are motivating them to break free from America's diktats by refusing to use the US dollar.
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