15 Hrs
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الاقتصادية
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Can high inflation solve US $40T debt
The article points out that the Trump administration is considering ways to reduce the U.S. debt burden of $40 trillion, particularly by relying on high inflation. The debt-to-GDP ratio, which has exceeded 120%, indicates that the country is borrowing at a rate surpassing the growth of its economy, increasing the risks associated with borrowing costs. Trump suggests that rising inflation, which can erode the real value of debts, might accelerate debt repayment, although this option raises concerns among economists—especially given the Federal Reserve’s ongoing commitment to a 2% inflation target. It is believed that high inflation can indirectly reduce the debt burden, but controlling and facing inflation remains a challenge, as policies will need to strike a balance between improving fiscal health and avoiding the adverse effects of excessive inflation.
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