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US State Debt Exceeds $19 Trillion

According to the US Ministry for Finance, the country’s state debt by the end of January hit a record $19 trillion; 103% of the country’s GDP. Under the Obama administration, the debt has almost doubled: at the moment he was elected, state debt stood at $10.6 trillion. This has given rise to republican accusations that Obama has been mismanaging state funds. The White House has rejected these claims, explaining the rise as a result of actions to fight off the economic crisis which erupted under republican George Bush.

In 2017, the US will again see state debt levels rising, although this has become something of a norm over the past few years. In any case, this will be a talking point and a chance for the political parties in the country to trade blows, perhaps bringing governmental work to a temporary halt.

The debt level is worth considering from the point of view of its servicing and the American Ministry for Finance manages to borrow money quite cheaply. Despite other countries, including China, reducing investment in American debt, general investor interest in these as long-term securities is not weakening and as US interest rates normalize, this investor interest is only set to rise.

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Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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