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Under President Donald Trump, the USA is intensifying its irresponsible debt course: Trump's latest spending package, packaged in the “Big Beautiful Bill Act”, threatens to massively increase the USA's budget deficits and national debt. The new law stands for large-scale tax cuts - without even remotely visible counter-financing. And, of course, Donald Trump (known as the “King of Debt”) plays a very central role in this plan.
Against this backdrop, Moody's - the last major rating agency - has also withdrawn the USA's coveted AAA credit rating. At the same time, the US bond market is also signaling its acute concern about the USA's fiscal drift with the recent sharp rise in interest rates.
Behind this image of the USA is a debt policy that is hardly sustainable in the long term and is being constantly exacerbated by the unbridled spending spree of the political elite. Even today, the USA has to spend around three billion US dollars on interest payments - every day!
The outlook for the future is correspondingly bleak: According to projections by the Congressional Budget Office (CBO), a kind of fiscal control authority for the USA, the US debt mountain will almost double in the next twenty years, to almost 200% of GDP (note: the graph is based on expectations even before the new law is implemented!).
An escalation in US debt would have very dangerous consequences for the integrity and stability of the entire global financial system. The FERI Cognitive Finance Institute has been warning of this for some time, most recently just a few weeks ago in the new “Big Picture: 2025”.
The analysis can be downloaded from the download area on this page.
