Financial Expert Warns of Potential 2025 Meltdown as $34 Trillion Debt Threatens Next Administration

America’s $34 Trillion Debt Could Disrupt Global Economy, Warns Wharton Business School Professor

Wharton Business School Professor Joao Gomes has issued a stark warning that America’s staggering $34 trillion debt could have dire consequences for the global economy as soon as next year if costly policies are pursued by the next president. Gomes predicts that the debt-to-GDP ratio could soar to 190 percent by 2050 if the current trajectory continues.

The United States has witnessed the largest deficit accumulations since the Great Depression in the 1930s under the last two administrations. Despite this alarming trend, Gomes believes that both the Republican and Democrat parties lack the political will to address the rising debt issue.

The US national debt hit a record high of $34 trillion at the close of 2023, translating to a federal debt burden of $101,233 for every American. The sheer magnitude of this debt poses a significant threat to America’s economic future, with interest payments alone surpassing $1.8 billion per day.

The mounting debt load could exert upward pressure on inflation, influencing interest rates and key programs like Social Security and Medicare. Concerns are mounting as interest payments on the national debt are projected to eclipse defense spending this year and are expected to become the second-largest government expenditure by the end of 2024.

Net interest payments on the debt have been rapidly rising over the past few years, with projections indicating that they could exceed $1 trillion annually by 2026. With such daunting figures on the horizon, urgent action is needed to prevent a debt crisis that could have far-reaching implications for the US and the global economy.