The David McWilliams Podcast Will America’s Debt Crash the Global Economy?
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Jun 10, 2025 Delve into America's staggering $34 trillion debt crisis and the potential ripple effects on the global economy. Explore how tax cuts and spending sprees may lead to a cracking bond market, raising alarms of a dollar crisis. In Ireland, an overheating economy grapples with rising rents and traffic woes, revealing the urgent need for sustainable growth. The conversation connects macroeconomic issues to everyday life, urging a balanced approach to urban challenges while pondering the cultural impacts on well-being and investment.
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U.S. Long Bond's Fragile Safety
- The U.S. long bond is considered the safest asset due to the assumption the U.S. will never default.
- Rising U.S. debt challenges this safety and threatens global financial stability.
Debt Growth Outpacing Economy
- U.S. debt exceeding GDP exacerbates fiscal instability when interest costs rise above growth rates.
- This dynamic pressures the government to raise taxes or cut spending to avoid crisis.
Global Borrowing Erodes U.S. Manufacturing
- America finances its deficits by borrowing from foreign countries in exchange for bonds.
- This prolonged borrowing has eroded the U.S. manufacturing base over 40 years.