Growing crisis of the us federal finances system USA: default delayed but not cancelled

Abstract

The article analyzes the course and results of the US budget crisis caused by the need to raise the ceiling of public debt, which reached $31.4 trillion by the beginning of 2023. It is emphasized that this budget crisis is the second crisis of its kind after 2011. The article draws major historical parallels between the 2011 and 2023 budget crises. It is noted that both crises arose as a result of the victory of the Republican Party in the 2010 and 2022 midterm elections, which allowed the Republican leadership of the US House of Representatives to draw up plans to sharply decrease the growth rate of the leverage on the American economy. Both in 2011 and 2023, in the House of Representatives Republicans were opposed by the Democratic administrations of B. Obama and J. Biden. It is mentioned that they invariably advocated an "automatic" increase of the ceiling of the public debt, while Republicans demanded budget reforms, insisting on dramatic reduction in expenses on federal budget. According to the author, the inertia of uncontrolled growth of budget defi cits and an increase in the pyramid of debt obligations is deeply rooted in the United States, and at the same time the politicians of both ruling parties seek to shift the solution of the country’s acute fi scal problems to subsequent administrations and congresses of new convocations. By 2033, the federal government’s gross debt is expected to be $50.0 trillion, the ratio of gross debt to GDP will have reached nearly 130.0 %, and the amount of paid interest will be comparable to the size of military budgets.