Staggering US Debt vs. China: The Gap Widens

The United States has always been a superpower in the world, leading the way in both economic development and military strength.

Over the years, countries have been showcasing their capabilities in import and export trade to rapidly develop their economies, which has extended to the issue of national debt.

The United States claims to have a very strong economy and also possesses an external debt of 24.8 trillion yuan.

In recent years, our country has also been developing rapidly.

Only by looking at our country's external debt can we understand the gap.

Speaking of the United States' external debt, it can be traced back to the American Revolutionary War at the end of the 18th century.

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At that time, the United States issued bonds to the outside world to raise funds for the war.

Led by the first Secretary of the Treasury, a series of financial strategies were implemented abroad, and the debt issues brought about by the war in other parts of the United States were also taken over.

In this way, the U.S. national debt system has taken shape.

By the 19th century, with the continuous expansion of the U.S. economy, national debt has gradually become a regular way for the United States to raise funds.

It is worth mentioning that the root of the rapid increase in U.S. national debt comes from the two world wars.

It can be said that these two wars have brought the scale of U.S. national debt to a peak.

When World War I broke out, the United States issued a large number of national bonds to support the war, and the amount of U.S. national debt continued to rise.

With the outbreak of World War II, to some extent, it further intensified the trend of U.S. national debt, and the level of national debt also reached an unprecedented level.

However, with the end of the war, the United States, as a victorious country and the subsequent economic growth, the issue of national debt has also been gradually stabilized.

With the outbreak of the U.S.-Soviet Cold War, the United States' ambition for hegemony has been satisfied, and the expenditure on national defense research and manufacturing has been continuously increased, so that the originally calm national debt has soared again.

But at this time, the economic growth of the United States has been able to balance the expenditure very well, which has also greatly alleviated the debt crisis.

All this changed after the 911 terrorist attack.

The United States increased its expenditure and invested in global military operations and the war on terrorism, so that the national debt soared again.

Originally, it could rely on its own economic development to gradually ease this situation, but the global financial crisis in 2008.

In order to tide over the difficulties, the federal government had to stimulate the national economy and implement large-scale fiscal stimulus measures, resulting in the amount of national debt reaching a historical high.

In fact, seeing this, it is not difficult for us to find that every increase in U.S. national debt is related to some major events in the country.

From the Revolutionary War to the global financial crisis, every major economic or political change has had a significant impact on the level of national debt.

So, how much is the current U.S. national debt, and what are the components?

According to the latest news released by the U.S. Department of the Treasury, by the end of July this year, the U.S. national debt has exceeded the 35 trillion yuan mark, which is about 248 trillion yuan in RMB.

Such growth has been very common in the development of the United States.

Due to the continuous rise of U.S. national debt in recent years, it has been warned many times.

However, the United States has not taken any measures, but the two parties in the country are still increasing fiscal expenditure to compete for the right to govern.

Both parties are busy "throwing money", and the bill to reduce expenditure and control debt is difficult to move in Congress.

So, what are the main components of U.S. national debt?

National debt is generally composed of two parts, which are the debt held by the public and the debt held by government accounts.

The debt held by the public is the bonds issued by the country to individuals and enterprises at home and abroad, including foreign governments.

The debt held by government accounts generally refers to the debt problems owned by various government trust funds.

The U.S. national debt is composed of these two major parts.

According to the current situation, China and Japan are the two largest holders of U.S. foreign debt, and the current debt limit of the United States is still rising.

On the surface, the United States seems to be smooth sailing, but in fact, it is already a golden shell and a rotten core.

The United States is now facing a situation where it cannot repay its debts.

According to the calculation of the relevant departments of the United States, the current external debt scale of the U.S. federal government has reached 124% of the national GDP.

They are now constantly robbing Peter to pay Paul, and they have really fallen into a dead cycle.

Our country's economy is also developing rapidly, and our country also issues national debt.

So what is the current level of our country's national debt?

In fact, our country's national debt has existed since the Qing Dynasty.

Due to the incompetence of the Qing government, the Eight-Nation Alliance invaded our country, carried out arson, killing, looting, and plundering, and also demanded that we cede territory and pay compensation.

This humiliation is unforgettable.

However, with the end of World War II, the new China was officially established.

At the beginning of the founding of our country, in order to promote economic development and make up for the financial emptiness of the country, the first national debt was issued in 1950.

Until 1968, we paid off all the principal and interest, and the country implemented the concept of zero debt, and the country suspended the issuance of national debt.

It can be said that this issuance of national debt, to a certain extent, made up for the financial emptiness of the country, and brought great help to our country's economic development.

It is precisely because of this that the solid foundation for the resumption of national debt was laid.

With the arrival of reform and opening up, our country has experienced many major institutional reforms.

In 1988, the national debt was once again opened for circulation and allowed to be traded on the market.

As time goes by, the stock of our country's national debt continues to rise, which also provides a key foundation for the development of the national debt market.

Before the Asian financial crisis, our country's national debt market system had taken shape.

With the outbreak of the financial crisis, the issuance of national debt is also increasing day by day.

With all kinds of experiences, it can be seen that the importance of national debt to economic development.

By the end of 2023, the balance of our country's national debt was 70.77 trillion yuan, which is completely within the controllable range of the country compared with the United States.

Moreover, in recent years, our country's import and export trade, export income is steadily greater than import expenditure, which is also a good thing for us.

After all, relying on imports blindly is not a good thing.

The issuance of national debt is the preferred path for every country to pursue economic development, and it is also a manifestation of a country's reputation on the international stage.

Our country's control and management of national debt are very in place, but our country, as the largest creditor of the United States, the U.S. economy is already on the verge of collapse.

If the United States defaults on its debts at that time, our country's economy will be greatly impacted.

At that time, how should our country deal with it?

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