IYY - 8 Truths About U.S. Government Debt

2024-01-27 10:30:00 ET

Summary

• While it’s more than $34 trillion, the US debt isn’t necessarily a problem for investors, in my view, for eight reasons.
• The US is a good creditor with more assets than liabilities, and a significant portion of the debt is domestically owned.
• US Treasuries are one of the safest, most liquid assets in the world. It’s unlikely investors will lose their appetite for them.

By Brian Levitt , Global Market Strategist

Is US debt a problem?

There’s a perception, perpetuated by the media and many elected officials, that the US government debt is a looming disaster. Many even believe that a day of reckoning, when the US government collapses under the weight of its own debt, lurks. The national debt is now more than $34 trillion, representing 122% of the US gross domestic product, and has risen significantly in recent years, with more than $20 trillion in new debt added in the past 14 years. ³ Should Americans be concerned? Are investors at risk? The reality is very different....

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