The current US national debt situation is directly caused by the inflation rates, interest rates and the economic state.
These factors also put pressure on the worth of the dollar, thus, aggravating the risk of inflation or devaluation.
The U.
S.
dollar is considered to be the reserved currency in the world.
Should a different currency take the place of the dollar, the United States will have to resort to higher interest rates to draw in more capital.
This occurrence may cause the US economy to crash drastically.
The U.
S.
federal government's official auditor, referred to as the Government Accountability Office or GAO, feels the nation is presently on an unstable path and that the experts responsible are not properly approaching the economic issues.
The budget introduced by the President in 2010 showed that the annual US national debt will increase by at least $1 trillion each year till 2019.
With this figure, it's predicted that the US national debt may increase up to $23.
3 trillion by 2019.
In addition, the financial burden on the federal government has amplified a result of the subprime mortgage crisis with approximately $10 trillion in guarantees or commitments and over $2.
6 trillion in expenditures or investments since 2009.
The U.
S.
also has revealed that its imports are now exceeding the exports, thus resulting in a massive trade deficit.
This deficit was made possible by the large investment funds involved and the capital account surplus.
A country that is running or managing a current account deficit is required by the payment balance identity to have capital account or investment.
In 2005, Ben Bernanke presented the consequences of the government's current account deficit movement and pointed out that it will result to imports exceeding exports.
From 1996 until 2004, the nation's current account deficit was raised by $650 billion.
It went from 1.
5 percent to 5.
8 percent of Gross domestic product.
The US national debt may also affect the rates of financial growth.
The Congressional Budget Office or CBO has reported the different risk factors that may cause the increasing debt levels: -- Increasing the part of the government savings that'll be allotted in picking up the US national debt rather than allocating it in government investments such as computers and factories will lower the output and the earnings.
-- If the marginal tax rates are increased to pay interest costs, government savings will be reduced.
-- Increasing interest cost will result in reductions of government programs.
-- Limitations set to limit the power of policymakers to use the fiscal policy to deal with the economic troubles.
-- Investors request increase in rates of interest due to higher risk of economic crisis.
Numerous government agencies provided information and analysis of the budget and the US national debt.
These agencies include the Congressional Budget Office, the U.
S.
Treasury Department, the Government Accountability Office, and the Office of Management and Budget.
As reported by these organizations, the federal government is looking at crucial long-term fiscal challenges as government spending on Social Security, Medicaid and Medicare are greatly increasing faster than the economy.
These factors also put pressure on the worth of the dollar, thus, aggravating the risk of inflation or devaluation.
The U.
S.
dollar is considered to be the reserved currency in the world.
Should a different currency take the place of the dollar, the United States will have to resort to higher interest rates to draw in more capital.
This occurrence may cause the US economy to crash drastically.
The U.
S.
federal government's official auditor, referred to as the Government Accountability Office or GAO, feels the nation is presently on an unstable path and that the experts responsible are not properly approaching the economic issues.
The budget introduced by the President in 2010 showed that the annual US national debt will increase by at least $1 trillion each year till 2019.
With this figure, it's predicted that the US national debt may increase up to $23.
3 trillion by 2019.
In addition, the financial burden on the federal government has amplified a result of the subprime mortgage crisis with approximately $10 trillion in guarantees or commitments and over $2.
6 trillion in expenditures or investments since 2009.
The U.
S.
also has revealed that its imports are now exceeding the exports, thus resulting in a massive trade deficit.
This deficit was made possible by the large investment funds involved and the capital account surplus.
A country that is running or managing a current account deficit is required by the payment balance identity to have capital account or investment.
In 2005, Ben Bernanke presented the consequences of the government's current account deficit movement and pointed out that it will result to imports exceeding exports.
From 1996 until 2004, the nation's current account deficit was raised by $650 billion.
It went from 1.
5 percent to 5.
8 percent of Gross domestic product.
The US national debt may also affect the rates of financial growth.
The Congressional Budget Office or CBO has reported the different risk factors that may cause the increasing debt levels: -- Increasing the part of the government savings that'll be allotted in picking up the US national debt rather than allocating it in government investments such as computers and factories will lower the output and the earnings.
-- If the marginal tax rates are increased to pay interest costs, government savings will be reduced.
-- Increasing interest cost will result in reductions of government programs.
-- Limitations set to limit the power of policymakers to use the fiscal policy to deal with the economic troubles.
-- Investors request increase in rates of interest due to higher risk of economic crisis.
Numerous government agencies provided information and analysis of the budget and the US national debt.
These agencies include the Congressional Budget Office, the U.
S.
Treasury Department, the Government Accountability Office, and the Office of Management and Budget.
As reported by these organizations, the federal government is looking at crucial long-term fiscal challenges as government spending on Social Security, Medicaid and Medicare are greatly increasing faster than the economy.