Global debt has hit an all time high at $250 trillion in the first half of 2019. It is projected to reach $255 trillion by the end of the year. The first half of 2019 has generated $7.5 trillion. This increase in global debt is due to the borrowing in the U.S and China. In the article "Global Debt surged to a record $250 trillion in the first half of 2019, led by the US and China" by Spriha Srivastava said "China and the U.S. accounted for over 60% of the increase." With the global's debt increasing, it raises concern with investors. The increase in the global's debt might be detrimental to the stock market.
https://www.cnbc.com/2019/11/15/global-debt-surged-to-a-record-250-trillion-in-the-first-half-of-2019-led-by-the-us-and-china.html
If the trade war continues, it could cost the global economy $700 trillion by the end of 2020. Tariffs are a poor instrument to solve the trade deficit, so these trade tensions must be resolved. It has significantly lowered business confidence which explains the drop in investment.
ReplyDeleteWe have spoken about the US's debt many times in class. There are many ways to reduce the debt. As professor Skosples has said, the ways of reducing the US's debt is "un-American". I wonder if a politician or an economist in the future will finally make a change in how the US works in order to reduce the debt.
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