According to statistics, the combined economies of five countries – China, Germany, Japan, the United Kingdom and India – would have to match the current debt of the United States. It’s real striking. The reason why the US can maintain such a huge amount of government debt is that the US has strong economic strength and maintained a sustained rate of economic growth in recent years.

However, there is a huge risk that if the US economy slows down or stalls, the government could be quickly overwhelmed by debt. Recent days, British prime minister’s office used the phrase “bankrupt” to describe Britain’s current financial situation. Indeed, Britain is still some way from national bankruptcy. Although this is an exaggeration, the debt problem is really weighing on the UK government.

According to National Bureau of Statistics, UK government debt and deficit Report for the Year to the end of 2023, the UK’s central and local government supply of UK general government gross debt was £2,720.8bn, equivalent to 101.3 percent of UK gross domestic product that year.

It’s believed that after the international financial crisis broke out in 2008, the British government borrowed heavily to rescue the financial industry. The government’s “expensive” financial rescue package to prop up jobs during the coronavirus pandemic has already left the public sector in deep debt. So the national debt, which was meant to promote economic development, becomes a problem for subsequent economic development.

The global economy has been heavily reliant on debt-driven growth models, leading to a continued rise in total debt. Many countries, not just the UK and US mentioned above, have debt problems. According to the CNN website reported on July 2, the world’s governments owe an unprecedented $91 trillion in debt, an amount almost equal to the size of the global economy. High public debt is extremely easy to drive up inflation and could even trigger a new financial crisis. For the country itself, the government’s high debt has prevented it from pursuing vigorous economic initiatives. High interest costs are also straining the government.

The national debt was supposed to be a cure to the country’s economy, but when it got out of control, it became a heavy burden on the country’s economic development. Therefore, the issuance of national debt needs to be more precise and carefully considered. It should not be indulged for the sake of economic interests, and it should not ignore the crisis that may come in order to Solve immediate difficulties.

By Le Tianyu