Federal debt pyramid and record budget deficits as a threat to national security of the USA

Abstract

The article analyzes the transformation of the problem of federal debt and budget defi cits in the United States from a sphere that has a purely economic dimension to the most acute task of ensuring the US national security. It is emphasized that the main demarcation line that predetermined the distinction between the purely economic dimension of the problem of debts and defi cits and national economic security was the ratio of federal debt to GDP, equal to 119 %, recorded in the mid-1940s after the end of World War II. This indicator was considered a benchmark for the historical strength and stability of the entire US federal fi nance system. Before the start of the fi nancial and economic crisis of 2020–2021, provoked by COVID-19 pandemic, the United States believed that they had about 10–15 years during which they could solve the problem of debts and defi cits relatively painlessly, but already in 2020 as a result "Super-aggressive" fi scal policy aimed at keeping the American economy afl oat, the United States has come close to the debt-to-GDP ratio of 130 %. Forecasts by federal government offi cials indicate that the debtto- GDP ratio will not fall below this level over the next 30 years, leaving the federal fi nance system highly vulnerable to shocks and economic blows that could potentially lead to a sudden collapse of the accumulated debt pyramid. The rapid transformation of the situation with debts and defi cits into the most acute problem of national economic security has already led to an almost complete paralysis of fiscal policy, which, in the context of the recession of 2022, turned out to be almost completely devoid of a countercyclical orientation. In addition, the US Federal Reserve took the path of using inflation to reduce the debt burden on the US economy, which predetermined the formation of a "toxic" inflationary environment both in the US and in the global economy in the near foreseeable future. The debt trap that the United States fell into at the beginning of the third decade of the 21st century predetermined the extremely aggressive forms of US behavior in the system of international economic relations, including the unleashing of economic wars, with the ultimate goal of demonstrating to the world community that the United States will never, under any circumstances, pay off their accumulated public debt, as well as the debts of other sectors of the US economy.