The U.S. national debt has reached $36 trillion ringing warning bells that an economic catastrophe is on the cards. A $2 trillion increase in 2024 alone is a record high and the numbers are mounting leading to obstacles in economic growth. The debt-to-GDP ratio has crossed 200% and every U.S. citizen now has a debt of over $100,000 on their head. The development is raising concerns that the U.S. could go bankrupt soon as debt turns worse.
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Debt of $36 Trillion Can Make the U.S. Go Bankrupt?
The U.S. can maneuver troubled waters if the White House and Congress control their spending. The upcoming Trump administration needs to reduce government spending and significantly cut debt. Trump appointed billionaire entrepreneur Elon Musk and the Republican party’s Vivek Ramaswamy to address government spending through a new Department of Government Efficiency (DOGE). The goal of DOGE is to reduce U.S. debt and now allow the nation’s finances to go bankrupt.
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Musk revealed that he can significantly reduce the U.S. federal budget, potentially saving billions per year. The cuts include reductions in public broadcasting budgets and financial support for abortion rights advocacy groups. However, the Democrats are unhappy with the policies as they claim it breaches their rights. DOGE needs a balancing act to keep both sides of the aisles together and keep debt in check to avoid the U.S. going bankrupt.
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In addition, financial experts have noted that the debt-to-GDP ratio could increase drastically if spending is not brought under control. The U.S. could spend more on interest payments than focus on development, infrastructure, and education combined. While the Joe Biden administration mishandled the debt, it is now up to the Trump administration to prevent the U.S. from going bankrupt. The next few years will decide the course of the economy and the finances of the U.S.