Americans are known for living beyond their means. Given the fact, that the United States is the largest economy in the world and the US dollar is the global reserve currency, the Central Bank of the country simply prints money, and the countries around the world buy it. However, given its pre-eminent position, the governments in the United States (irrespective of the party affiliation) have become addicted to debt. Since the Coronavirus pandemic inducted the country, it has exponentially increased spending in order to revive the economy and all this spending is being financed by debt.
As per a report presented by US Congressman Alex Mooney, the national debt of the country has soared to 29 trillion dollars, which is around 10 times India’s GDP in 2020. Moreover, the majority of this debt is owed to countries that are no friends of the United States like China, to which the US government owes more than 2 trillion dollars.
India has also loaned around 216 billion dollars to the United States. The Reserve Bank of India has foreign exchange reserves of more than 500 billion dollars and a majority of this is invested in American debt.
“The people who are loaning us the money we have to pay back are not necessarily people who have our best interest at heart. Brazil, we owe USD 258 billion. India, we owe USD 216 billion. And the list goes on the debt that is owed to foreign countries,” said Mooney.
Mooney, who was opposing the latest 2 trillion dollars stimulus package proposed by the Biden Administration, exposed the American addiction to debt in his speech at the US Congress.
“We are going to grow our debt to USD 29 trillion. That is even more debt owed per citizen. There is a lot of misinformation about where the debt is going. The top two countries we owe the debt to are China and Japan, not actually our friends,” Congressman Alex Mooney said.
“We are at global competition with China all the time. They are holding a lot of the debt. We owe China over USD 1 trillion and we owe Japan over USD 1 trillion,” the Republican Senator from West Virginia said on the floor of the US House of Representatives.
Mooney also blasted former US President Obama, from whose tenure the exponential rise in the public debt started. “Since the eight years Obama was President, we doubled our national debt. And we are adding another—projected here—a completely out of control debt-to-GDP ratio,” said Mooney.
Highlighting the addiction to debt in the last few years, Mooney said, “We have actually borrowed USD 10,000 per person in one year. I mean, that is out of control.”
Countries like India and China, which loan billions of dollars to the US government through investment in treasury bills, should diversify their investment in order to ensure that in the case of default, the hard-earned money is not wasted.
Moreover, countries around the world, especially the developing ones, should focus on digital currencies and cryptocurrencies transaction to end the hegemony of Western countries and their currencies – US dollars and Euro – from global trade.