One of the most talked about topics recently is the debt burden of the US. According to the report released on June 4, the total debt in the US has reached its historic peak of 36.2 trillion. If there is no interest rate cut, it seems inevitable that this figure will rise even more towards the end of the year. Of course, such a high debt amount has the potential to shake not only the US but also the world economy.
A debt crisis in a country is an economic situation that arises from a country's inability to pay its domestic or foreign debt, and if combined with political factors, it has the potential to cause large-scale damage. Especially if this country is the US, just think about what will happen to the world economy. While the risk of such a situation occurring is theoretically possible, I see the risk of it happening in practice as quite low.
Why do I see this possibility as so low? Because the US dollar is a global reserve currency. This feature provides the US with unlimited borrowing convenience, and in addition, US Treasury bonds are considered risk-free assets worldwide, so they are in the class of assets that are in demand at all times. At the same time, the US Treasury borrows in its own currency.
If we look at the US's place in the world economy, it maintains its leading position in the world. It is the world's largest economy with a nominal GDP of approximately $30.5 trillion, and its share in the global economy is 25%. The US economy is still the focus of global investors, especially in sectors such as technology, finance and healthcare.
When we look at possible risks, we can say that interest expenditures have recently exceeded the defense budget and that the sustainability of this situation is a serious threat. If credit rating agencies downgrade the country's credit rating, which Moody's downgraded the US credit rating from AAA to AA1 in 2025, if this continues, foreign investors may also experience a loss of confidence, and with the decrease in interest in bonds, bond interest rates will inevitably increase. This may create a shock wave in the global financial system. As a result, the dollar may lose its reserve currency status over time. This is of course a low risk, but the possibility of this risk occurring should also be taken into consideration.
As a result, the debt level in the US is a structural risk, not a crisis, but a cause of fragility. If the US can maintain its share in the world economy and the dollar's status as a global currency, the likelihood of potential risks occurring is quite low. However, if Trump's populist policies and tariffs cause the country's share of the world economy to decrease, the loss of confidence that will occur in international investors will cause interest in bonds to decrease and interest rates to increase even more. This process will cause foreign debt to increase even more and may also bring about a debt crisis. Although this poses a risk, it does not mean that it will occur.
