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Did the trade wars and the announced budget cuts of the Economic Health of the United States really improve? Will the Grandiloquent talk to Donald Trump’s inability to stop the financial degradation of the country? Moody’s reduced the American sovereign note, which is a sign that the numbers do not lie. This basic indicator shows that the speed of reforms does not apply to the speed of economic damage. The question arises: is the president a real magician or a simple illusionist in the face of the collapse of the American economy?
In short
- Moody’s retrograde note of the US in AA1, alerting a debt that has become too huge.
- US debt reaches 134 % of GDP in 2035, according to official projections.
- Interest loads could absorb 30 % of federal income within ten years.
Moody’s Degrades The United States: Alarm signal for the global economy
May 16, 2025 Moody’s reduced Sovereign Note The United Statestransmission From “AAA” to “AA1”. This downgrading, the last of the main rating agencies, is a historical scene. Reflects the loss of confidence face to face Debt considered too heavy and permanent deficits. Moody’s underlines:
Subsequent US administrations and Congress failed to reverse the trend of annual budget deficits and rising interest costs.
This degradation is not only symbolic. It warns investors and can increase the cost of financing the United States. This increase could the consequences of the world’s economywhose dollar remains a pillar. In addition, this signal weakens the American position of the world economic leader and throws the shadow of the country’s credibility.
Stephen Moore, near Trump, this decision strongly criticizes and qualifiesReducing the “scandalous” remark.
The markets responded by increasing the revenues of state accounts, reflecting the surrounding nervousness. The challenge is the size: to avert this spiral before slowing down the American and global economy.
American debt: A burden that threatens economic stability
The weight of US debt is the core of concern. Currently, lFederal debt exceeds $ 36,000 billion. Moody’s plans to reach 134 % of GDP by 2035, compared to 98 % in 2024. This explosion is explained by growing deficits, increasing compulsory expenditures, especially interest and tax revenues that stagnate.
The report stipulates that the load in 2024 will drop from 18 % of federal income to almost 30 % in 2035. This weight increases the budget and limits the room for the maneuver for courageous economic policies. In addition, if the extension of the 2017 tax cuts is confirmed, this could further expand the deficits and add nearly $ 4,000 billion within ten years.
These characters are translated American economy increasingly stacked by its debt. As a result, the ability to invest in growth, innovation and competitiveness is questioned. This trend could lead to gradual degradation of living standards and weakening of US economic institutions.
US economy today: tension and future prospects
The US economy is undergoing a fine period. Trade war initiated by Trump with created customs tariffs Tension that disrupts global supplier chains. In addition, the aim of cuts in the budget focuses on reducing public spending, but their impact is uncertain.
Inability to stabilize concerns about feeding debt. Efforts to reduce deficits appear against political opposition and structural restrictions. PUSH The fragility of the financial system This is particularly felt about increasing the level of bonds. This context creates an atmosphere of uncertainty for society and consumer.
- Federal debt: $ 36,000 billion (2025);
- Debt/GDP ratio: 98 % in 2024, planned to 134 % in 2035;
- Interest burden: 18 % of income in 2024, 30 % planned in 2035;
- Tax impact of tax reduction: +4 000 billion in ten years;
- Planned inflation: 2.9 % in 2024.
In the face of these challenges, voices are raised to beg the alternative to simple budget cuts. Among them, Bitcoin gains popularity as a value of refugees and diversification instrument. Donald Trump himself seems to pay special attention to this new agreement that could affect the economic strategy of the coming years.
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Blockchain and crypto revolution! And the day when the impacts will be felt on the most vulnerable economy of this world, I would say against all the promises that I was there for something
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.