Analysts warn US debt could curb fiscal and geopolitical power
Semafor Signals cites Financial Times and Reuters analysis saying rising US debt will limit Washington’s domestic room to maneuver and geopolitical heft, with eventual spending cuts or tax rises likely.
“Geopolitical power and fiscal capacity complement each other,” an analyst wrote in the Financial Times.
US debt levels are reaching levels that will soon curtail Washington’s domestic room for maneuver and its geopolitical heft, analysts warned.
Though extreme scenarios like a default are seen as highly unlikely, authorities will eventually have to cut spending or raise taxes, which likely “ means higher costs of living for everybody,” one economist told The Washington Post.
Abroad, “ geopolitical power and fiscal capacity complement each other,” an analyst wrote in the Financial Times.
A Reuters columnist noted that China — which also has debt problems — retained the advantage of having a historic willingness to impose heavy pain on its people in the name of national sacrifice, meaning in this facet of “the superpower struggle … China seems to have the edge.”