As the current world's largest economy and the most economically developed country, the United States should theoretically be very wealthy. However, intuition often goes in the opposite direction.
Recently, the data released by the U.S. Department of the Treasury once again shocked everyone. The current U.S. debt has surpassed the 35 trillion yuan mark, even exceeding its own economic total.
The United States has been overdrawing for many years, and in recent years, it has begun to show signs of fatigue.
These debts, on average, amount to about 100,000 U.S. dollars per American. The problem is that the annual income of many American families does not even reach half of this figure.
The United States has long been addicted to borrowing money.
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In fact, the culture of borrowing money in the United States has long been deeply rooted in people's hearts. Credit card consumption and bills that can never be paid off are the norm in many American families.
The people borrow money, and the government also borrows money. The high welfare system and generous spending in the United States are not because the United States is highly developed today, but because the United States dares to borrow.
Although the United States has always wanted to brake, it is easy to borrow money but difficult to repay it. The debt of the United States has ultimately rolled more and more, reaching a staggering 35 trillion U.S. dollars.
In just the first half of 2024, the interest paid by the United States has reached as high as 800 billion U.S. dollars. This interest even exceeds the U.S. Treasury bonds held by China.Once upon a time, holding U.S. Treasury bonds was a coveted prize for all countries. At that time, the United States was the most prosperous beacon in the world and the core of the global economy. Holding U.S. Treasury bonds was even more stable than the fixed assets of many countries.
But as the saying goes, "Thirty years of prosperity, thirty years of decline," the United States' endless borrowing has ultimately led to the collapse of the credit of the U.S. dollar, and the country is deeply troubled by this astronomical debt.
Moreover, with the global movement away from the U.S. dollar, countless countries have also started to sell off U.S. debt, and China is one of them.
Currently, China's holdings of U.S. debt are only 771 billion yuan, successfully ceding its position to Japan and no longer being the largest creditor of the United States.
The crisis in the United States is now very obvious, which is that the domestic assets are not enough to cover the debts, and the government still needs to rely on borrowing to maintain operations. The Federal Reserve can only continue to raise interest rates, using this method to delay the explosion of this bomb for a while longer.
If they can hold on until the end of the U.S. election, this bomb will at least be handed over to the next president, rather than exploding in Biden's hands. What Biden needs to do now is to stabilize the situation as much as possible and maintain the normal operation of American society.
However, the continuous expansion of U.S. debt is actually related to the current inflation and the movement away from the U.S. dollar, and it is not caused by a single reason.
The hollowing out of the U.S. manufacturing industry, the half-dead real economy, and the enthusiasm of everyone for financial games have made the U.S. economy even more fragile.Once upon a time, products made in the United States were synonymous with quality. Even just a label of "imported from the USA" could make the price several times higher.
But today, American manufacturing has almost disappeared. These industries, which the United States considered "not profitable," have all been abandoned to developing countries.
After the decline of the real economy, the internet economy and virtual economy began to expand without limit. Behind this false prosperity is the hard support of the U.S. government.
In addition, the United States has always had a high welfare system, which also puts great pressure on fiscal expenditure. For various reasons, the current U.S. debt is compounding interest every year, and there is no sign of reduction.
Impact of selling U.S. debt
According to this, some people also propose that China can sell U.S. debt comprehensively, which will inevitably have a huge impact on the U.S. economy.
Indeed, selling U.S. debt will indeed have a certain impact on the United States, but compared with the United States' debt of 35 trillion U.S. dollars, these 700 billion U.S. dollars are indeed not much.
If a person owes the bank 300,000, the bank may urge to pay every day. But if a person owes the bank 3 billion and does not have a penny left, the bank may also have to provide good food and drink, hoping for you to make a comeback.
This is also the current logic of the United States. The United States cannot pay back temporarily, if the United States falls, then you will not get a penny.Although it is said that many countries are currently undergoing the process of de-dollarization, the US dollar still holds a very high status and plays a significant role in international trade.
Setting aside trade between China and the United States, many countries still use the US dollar for trade settlements. If China were to sell off all its US debt, it might be affected more than the United States.
After all, the United States is now in a state of being unafraid of anything, while China's import and export cannot be affected by this.
Therefore, foreign exchange reserves are still important today, and de-dollarization needs to be carried out gradually, and cannot be rushed.
The current world order, after all, was established by the United States and Western countries, and has been in operation for nearly 100 years. It is absolutely not something that can be changed in a day or two.
Moreover, a large amount of the United States' debt is actually held by domestic enterprises, with at least more than 70% of US debt held by American enterprises and various capitalists.
For these people, US debt is more like a means of controlling the entire country. In capitalist countries, capital manipulates everything, even politics.
Therefore, these holders of US debt will not ask the government for debt repayment, but will try every means to help the United States repay this debt.
From this perspective, the United States will not collapse due to these debts, and these capitalists holding US debt will not watch the existing order in the United States collapse, because they are the beneficiaries of the current order. Only by maintaining the operation of the United States can the profits of this debt be maximized.Of course, if all the debts the United States owes were foreign accounts, the U.S. might really be in deep trouble today.
In fact, before the 2008 subprime crisis, the U.S. had a certain surplus in its finances, but after that, the U.S. foreign debt began to soar, eventually reaching today's astonishing figure.
Does the United States really want to repay its debts? Actually, it does. In recent years, both the Obama administration and the Trump administration have been thinking about vigorously revitalizing the U.S. economy, at least to make the U.S. debt not look so terrifying.
But after a series of operations, it still couldn't withstand the tide of the times, and the U.S. debt kept rolling higher and higher. The Federal Reserve simply started to directly transfer the crisis by raising and lowering interest rates, making the whole world help to repay it together.
Terrifyingly, today's U.S. debt has been diluted many times by the U.S. dollar interest rate hikes, but it still has a staggering 35 trillion, and it's really hard to imagine how the U.S. government has spent so much money.
In today's era of globalization, the United States still wants to reduce economic pressure by manipulating the market and using the U.S. dollar as a small trick, which is obviously unrealistic.
These debts may become a big bomb for the United States in the future. If the United States encounters any global crisis again, it is very likely to be unable to withstand such an impact.
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