America is the world's most indebted country

As the days of a potential US debt default approach, the White House and Republicans are stuck in negotiations.

The United States leads the world's most indebted countries with $31.47 trillion, while President Joe Biden's administration continues its efforts to raise the debt ceiling.

In 2011, the United States faced for the first time the crisis of exceeding its debt ceiling, which resulted in a shock in the markets, stock and bond prices fell, investor confidence decreased, and it was also the first time that its credit rating was downgraded.

Debt ceiling crisis 2023

In January 2023, the US federal government reached the debt ceiling, which exceeds $ 31 trillion, but so far, the United States has not defaulted on its debt, while experts have warned that if Congress fails to approve raising the government debt ceiling, it may happen by June next.

As of May 2023, the total national debt of the United States was $31.47 trillion, after passing the $30 trillion mark for the first time in January 2022. By the end of 2019, before the coronavirus pandemic, the national debt was $23 trillion, but one year later, it had risen to $27.7 trillion.

 US debt.. What is its size and who owns it?

As the countdown to an unprecedented US debt default continues, two major global economies, China and Japan, are watching the situation with concern. The two countries hold the largest shares of US government debt among foreign investors, with a combined value of $2 trillion, out of $7.6 trillion of US Treasury bonds, held by foreign countries.

Over the past 60 years, almost every US president has experienced record budget deficits at some point, but Donald Trump, Barack Obama, and George W. Bush have suffered the largest US budget deficits in history, so the US government debt has continued to rise over the years Various local and international events affected him.

The US government borrows the most

According to the National Debt Bulletin issued by the US Treasury, debt ratios can be calculated according to each presidential term, and President Roosevelt's period was the most borrowing period from abroad, during World War II in the forties of the last century.

President Roosevelt's spending on the war effort led to some of the largest deficits as a percentage of total gross domestic product in American history, when the US government borrowed nearly $211 billion to help pay for World War II.

The impact of the US debt crisis on the global economy

In the event that the US House of Representatives does not pass the agreement to raise the debt ceiling, and after the global economy was subjected to two massive shocks from the Corona pandemic and the Russian-Ukrainian war, the horrific results may exceed the repercussions of the global financial crisis of 2008.

And with the approaching days of possible debt defaults, the White House and Republicans remain stuck in negotiations, and failure to reach an agreement in a timely manner may have catastrophic effects, but the US economy will not be the only one affected, but rather the entire global financial system, including:

US Treasury bond prices fell.

Causing chaos in the financial markets.

The decline in global economic activity.

High inflation rates to record levels.

High rates of unemployment.

Undermining the strength of the US dollar.

Opening the door to a new currency as a global reserve.

Global trade halted and global supply chains faltered.