(NewsInsights.org) – The United States is the most powerful country in the world thanks to its economic and military strength. However, according to a new United Nations report, it’s also the nation with the most public debt. This, coupled with the rest of the world’s increasing obligations, could have some serious implications.
According to the report, titled “A world of debt,” public debt has soared from $51 trillion to $97 trillion in just 14 years. That’s nearly a 100% growth, most of which is coming from developing countries in Africa, Latin America and the Caribbean, and Asia and Oceania. The US leads the world with the most debt at $33.417 trillion. The second most is China, with nearly $15 trillion and Japan follows behind in third place with just over $10.5 trillion. In developed countries, including the US, debt is trending downward. The report was quick to point out that the only place where debt is growing faster than Gross Domestic Product is in Africa.
While debt can be a powerful tool for a country’s development, allowing it to finance critical expenses and invest in its people’s future, there’s such a thing as debt growing too high or too fast. That’s when it becomes a burden.
With its current public debt rate, which encompasses around 34% of the global debt, the US could face some struggles, but not nearly as much as developing countries that don’t have the economic output to offset the outgoing expenses. For these countries, having too much debt makes it more difficult to invest in the services its people need, such as education and healthcare.
The UN report calls for a change to the “international financial architecture” in order to “ensure a prosperous future for both people and the planet. The United States is helping in this regard, having agreed to lend as much as $21 billion that will go into an International Monetary Fund trust. That money will then be loaned — with zero interest — to low-income countries to help boost their development.
Copyright 2024, NewsInsights.org
