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Is US debt a danger to the world?

Is US debt a danger to the world?

UAmerica should never be underestimated. How many times has the world debated whether America will get its budget woes under control or whether a final shutdown across the Atlantic will eventually drag global financial markets into the abyss. So far it has always gone well. It's also an argument against being too excited.

However, the wave of crises in recent years and the measures to deal with them, largely covered by national budgets, have significantly increased the global debt mountain. Effects and structural changes may not yet be fully anticipated.

And not just in the U.S., the question is again whether lenders will free states from borrowing costs — or whether they now see more risk and demand higher premiums for it. Some rating agencies have at least loosened things up a bit.

There is debate in economics, for these and other reasons, about whether the world is entering a new regime of structurally higher interest rates than before, after a period of very low interest rates and a short but severe period of high inflation. While the debt sustainability of countries like the United States is undoubtedly enormous, it would be imprudent to assume that it is essentially infinite.

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