Coupled with exorbitant budget spending, Washington’s deficit threatens economic growth, according to businessman Oleg Deripaska
Oleg Deripaska © Sputnik / Aleksandr Vilf
The US government is facing challenging times as it has to pay interest on the nation’s ballooning debt, Russian businessman Oleg Deripaska wrote on Friday on his Telegram channel.
The US national debt hit another record high in mid-September, surpassing $33 trillion. In early October, it spiked by $275 billion in a single day. According to the International Monetary Fund (IMF), US government debt is expected to increase from 123.3% of GDP in 2023 to 126.9% in 2024, and ultimately to 137.5% by 2028.
“Some officials in Washington, who apparently worked hard to come up with all sorts of sanctions, are now thinking about the high cost of (servicing) American debt, which is already more than $33 trillion. And they blame this on the not-so-transparent mechanism for placing and trading US bonds,” Deripaska, who has been sanctioned by the US, wrote.
The billionaire went on to point out that even if the transparency of the US Treasury market is improved fivefold, it is still unclear how the debt is going to be repaid.
He asked how Washington would pay the interest in two or three years, if it already has to pay off more than a trillion dollars annually. “This is the largest expenditure of the US government budget, which will be executed with a colossal 8% deficit this year and next,” wrote the founder of Rusal, the world’s second-largest aluminum company.
READ MORE: Horseman of the economic apocalypse: Friday’s US debt forecast has shocked traders and bankers
The growing US debt burden may guarantee a decline in interest among government officials in military spending, Deripaska concluded.
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