US Debt Reaches $40 Trillion, 'Ticking Time Bomb' Warning for Global Economy

As US public debt hit a record level of $40.047 trillion, annual interest payments on borrowing also reached $1 trillion. In the dollar system described by former French President Giscard d'Estaing as 'exorbitant privilege,' the US buys the world's wealth by borrowing in its own currency; however, this cycle has now entered a 'vicious circle.' The rollover of low-interest debt at high rates forces the government to borrow more, leaving the world's largest economy facing a 'ticking time bomb.'

History shows the role of excessive indebtedness in the collapse of the Spanish, Ottoman, French, and Austro-Hungarian empires. The Wall Street Journal questions whether the debt will topple the US from its superpower seat. China's potential dumping of hundreds of billions of dollars in US Treasuries could trigger a global debt crisis by causing prices to plummet and yields to soar. Trump's trade wars are escalating this risk into a 'debt war' dimension.

According to Adam Ferguson's 'Ferguson's Law,' when a superpower's debt service expenditures exceed its defense spending, it risks ceasing to be a great power. While the US is forced to print dollars to provide liquidity to world trade, it is simultaneously obliged to preserve the currency's value and creditors' confidence. This contradiction weakens US geopolitical power and makes political will a hostage to interest rate markets.