This paper is published in Volume-8, Issue-1, 2022
Finance and Economics
Shreevardhan Atit Agarwal
Dhirubhai Ambani International School, Mumbai, Maharashtra, India
Pub. Date
25 February, 2022
Paper ID
Unfunded Obligations, Stimulus, Outlay Payments, Social Security, Gini Coefficient, Neoclassical Growth Model, Disposable Personal Income, Credit Rates, Treasury Bills, Yield, Default, Debt-To-Gdp, Inflation, Interest-Rates, Real Interest-Rates, Real Gdp, Is-Lm Model, Taper, Phillips Curve, Income Security, Say's Law, Consumer Credit, Productivity


Shreevardhan Atit Agarwal. The sustainability of US debt, International Journal of Advance Research, Ideas and Innovations in Technology,

Shreevardhan Atit Agarwal (2022). The sustainability of US debt. International Journal of Advance Research, Ideas and Innovations in Technology, 8(1)

Shreevardhan Atit Agarwal. "The sustainability of US debt." International Journal of Advance Research, Ideas and Innovations in Technology 8.1 (2022).


US debt is a matter discussed worldwide, owing to the widespread use of the US dollar and the global economic power that the US holds. A large proportion of trade relies on the dollar, and many currencies are even pegged against the dollar. This has meant that global demand for the dollar has been constant. Furthermore due to a range of factors interest rates have remained extremely low, therefore the government has been able to borrow large amounts of debt and satisfy creditors. However, owing to the pandemic, unprecedented spending, tax cuts, and an unproductive spending plan the US government's fiscal position is slowly deteriorating. With uncertainty growing, the inevitability of tapering setting in, and rising inflation looming, the US economy must reconsider its spending patterns or cut back on current spending, both of which could lead to long-term social consequences. This paper discusses the current position of the government and its sustainability through various perspectives such as the ability to satisfy this debt in the future, growth hindered by debt through a neoclassical growth mode, unfunded obligations, and the effect of angst and defaults. On the contrary, it also explores how low-interest rates and the global strength of the dollar have made its position more sustainable than other countries. Finally, there are also proposals to help strengthen the government’s fiscal position, and long-term solutions to ease the situation and help the economy recover. These when implemented would not solve the crisis at once given its gravity but at least stabilize the government for the time being. Finally, after analyzing collaborating this diverse range of analyses, proposals, and information this paper proposes a concrete synopsis of something that could inevitably shake global markets and affect communities and countries at even an individual level.