- According to the International Monetary Fund, the United States must work harder to reduce its enormous national debt.
- If fiscal policy continues on the same path as it is now, government debt will rise to 140 percent of the size of the economy in eight years.
- To combat the budget deficit, future US governments will need to raise taxes and control spending.
- Also read: These are the 3 euro countries with the highest national debt relative to the size of the economy
According to the International Monetary Fund, the United States must work harder to reduce its enormous national debt. If fiscal policy continues on the same path as it is now, government debt will rise to 140 percent of the size of the economy in eight years. That could put both the U.S. economy and the global economy at risk, according to the Financial Stability Facility.
To combat the budget deficit, future US governments will need to raise taxes and control spending. Taxes should also be increased for families with incomes below 400,000, according to a recent IMF delegation to the United States. President Joe Biden, who has announced higher taxes on big corporations and wealthier Americans, has previously promised to save the group.
Last year, US government debt rose to nearly 121 percent of GDP. According to the IMF, it would help if some long-standing tax incentives were abolished, such as a tax credit for employers who provide health insurance to their employees. Taxes on corporations will also have to increase, and as the U.S. population ages, it’s better to keep health care costs under control.
Ahead of the presidential election, Biden’s opponent, Donald Trump, has said he wants to continue the tax cuts introduced under his administration. The former Republican president is considering further tax cuts for businesses and middle-income Americans if he is re-elected.