The size of the US federal government debt has exceeded $35 trillion

In the global economic landscape, the United States, as one of the largest economies, has always received global attention for its fiscal health. Recently, the latest data released on the website of the US Treasury Department shows that as of July 26th, the size of the US federal government debt has officially exceeded the $35 trillion mark. This figure not only sets a new historical record, but also once again focuses the global financial market's attention on the US debt problem.

Looking back at the past few years, the size of the US federal government's debt has been showing an accelerating trend of expansion. Since breaking through the $20 trillion mark in September 2017, the growth rate of US Treasury bonds has significantly accelerated. In February 2022, the size of US Treasury bonds exceeded $30 trillion; On June 16, 2023, the federal government debt exceeded $32 trillion in one fell swoop. Behind this series of data is the result of years of accumulated fiscal deficits, like a "time bomb" hanging high above the global economy.

The rapid growth of the size of the US federal government debt is influenced by multiple factors. First of all, in order to deal with the COVID-19 crisis and its huge impact on the economy, the US government had to adopt a series of large-scale economic stimulus plans, and trillions of dollars of financial support directly led to the rapid growth of debt. Although these measures have to some extent alleviated the short-term impact of the epidemic on the economy, they have also laid the groundwork for long-term economic burdens.

Secondly, the low interest rate environment is also an important factor contributing to debt inflation. Since the global financial crisis in 2008, the Federal Reserve has gradually lowered interest rates to historic lows in order to support economic growth and the job market. This low interest rate environment provides the government with cheap borrowing conditions, making it more inclined to maintain fiscal policy expansion through debt. However, this strategy also brings potential risks, as once interest rates rise, the government will face enormous debt pressure.

The continuous expansion of the US federal government debt has not only had a profound impact on the domestic economy, but also posed new challenges to the global economic landscape. Firstly, the high debt burden forces the government to balance the budget by increasing taxes or cutting public services. This will directly affect the consumption ability of the public and the investment willingness of enterprises, thereby putting pressure on economic growth. In addition, the credit risk brought by debt problems will also increase the volatility of financial markets, causing investors' confidence to be damaged and exacerbating the phenomenon of capital outflows.

From a longer-term perspective, as the world's largest economy and the primary issuer of reserve currencies, the United States' debt issues have a significant impact on the global economy. The International Monetary Fund has warned that the high and continuously rising level of US government debt could push up global borrowing costs and disrupt global financial stability. The loose fiscal policy of the United States has exerted upward pressure on global interest rates and the US dollar, driving up financing costs in other parts of the world and exacerbating existing vulnerabilities and risks.

Faced with the increasingly severe debt problem, the US government and the international community need to take comprehensive measures to alleviate debt pressure. Firstly, the government should carefully plan fiscal policies to avoid blind expansion and disorderly spending. Review and optimize existing expenses, remove redundant projects, and concentrate funds on developing long-term investments with benefits, such as infrastructure construction and technological innovation. These investments not only promote economic growth, but also provide a solid foundation for future debt repayment.

Secondly, promoting tax reform and standardizing the tax system are also important ways to solve the debt problem. By reforming the tax system to ensure fair and effective tax collection, the government can increase its sources of fiscal revenue and provide financial support for debt repayment. At the same time, the government should strengthen scientific prediction and strict supervision of debt management to prevent possible credit risks and market fluctuations.

In terms of financial markets, more overseas capital can be attracted through diversified financial instruments and increased market openness. This not only helps stabilize market confidence and reduce the risk of capital outflows, but also provides the government with more financing channels and lower financing costs.

In the globalized economic system, the economic connections between countries are becoming increasingly close, and any country's debt problem may have a chain reaction on the global economy. Therefore, governments of all countries should strengthen cooperation and communication, jointly formulate reasonable economic policies, enhance debt management and regulatory cooperation, in order to cope with possible economic risks and financial challenges.