Risks surrounding the US debt burden
Risks surrounding the US debt burden
Global & Regional Focus Notes
18 Ιουλίου 2011
• A gradual tightening of fiscal policy resulting in a primary budget deficit of about -2.5% in 2015 and -1.0% by 2021 will lead to a general government debt increase from 100% of GDP in 2011 to about 115% by 2021.
• The political disagreement is fueling investors’ uncertainty that the government will fail to reign over public finances. After the meeting between the president and congressional leaders on July 14, S&P concluded that there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling.
• As a result, foreign bondholders could diversify away from investing in the US debt, threatening the US and the global recovery.
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