ANDREW NEIL: America’s national debt has hit $40trillion. This is why it’s bad news for ALL of us
The US national debt has reached a historic $40trillion, a milestone that columnist Andrew Neil warns has far-reaching consequences well beyond America's borders. He argues the sheer scale and, crucially, the pace at which Washington keeps borrowing is unsettling global bond markets, which in turn is driving up borrowing costs for other major economies, including Britain.
The debt now equates to 124 per cent of US GDP, roughly ten times the UK's annual economic output, and the US is set to borrow a further $2trillion this year alone, around 6 per cent of GDP, with similar deficits forecast into the next decade. Neil says this matters particularly for the UK, which already pays higher borrowing costs than any other G7 nation and has bond yields among the highest of any developed economy. He points to rising interest payments (over $1trillion annually in the US, more than £110billion in the UK) and warns that mortgage and business loan rates are unlikely to fall and could climb further as governments worldwide compete for funds in increasingly nervous bond markets.
- US national debt hits record $40trillion, 124% of GDP
- America borrowing faster than any other major economy
- Rising global bond yields are pushing up UK borrowing costs too
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The US national debt has passed $40 trillion, a figure that measures everything the federal government owes after decades of spending more than it collects in tax revenue. Andrew Neil is a British broadcaster and columnist known for commentary on politics and economics, and in this piece he examines what the scale of that debt means for countries beyond America, including the UK.
The core issue is that America borrows money by selling bonds to investors worldwide, and when a government's debt grows very large relative to the size of its economy, those investors can grow wary and demand higher interest rates to keep lending. Because US bond markets are so central to the global financial system, shifts in America's borrowing costs tend to ripple outward, affecting how much other governments, and by extension their citizens, pay to borrow too.
This matters to ordinary readers because government borrowing costs feed through into everyday finance, including mortgage rates and loans for businesses. The UK already spends a large sum each year simply paying interest on its own debt, so any global increase in borrowing costs linked to America's finances could add further pressure on top of Britain's existing economic challenges.