US Heading to Fiscal ‘Train Wreck’ in 2025 Due to Large Debt, Spending Surges - Ex-World Bank Head
15:52 GMT 13.05.2024 (Updated: 15:56 GMT 13.05.2024)
© AP Photo / Susan WalshVice President Joe Biden listens during a ceremony in the State Dining Room of the White House in Washington, Thursday, Jan. 12, 2017, where President Barack Obama presented him with the Presidential Medal of Freedom
![Vice President Joe Biden listens during a ceremony in the State Dining Room of the White House in Washington, Thursday, Jan. 12, 2017, where President Barack Obama presented him with the Presidential Medal of Freedom Vice President Joe Biden listens during a ceremony in the State Dining Room of the White House in Washington, Thursday, Jan. 12, 2017, where President Barack Obama presented him with the Presidential Medal of Freedom - Sputnik International, 1920, 13.05.2024](https://cdn1.img.sputnikglobe.com/img/07e8/03/08/1117214567_0:114:3089:1852_1920x0_80_0_0_7de384b234aa3a3170ebf99f93caa32f.jpg)
© AP Photo / Susan Walsh
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WASHINGTON (Sputnik) – The large national debt and excessive spending policies of the US government could lead to a fiscal "train wreck" as soon as 2025, former World Bank President David Malpass said on Monday.
"All signs point to a fiscal train wreck in 2025 when the debt limit is triggered, spending surges, and tax rates jump," Malpass said in a post on LinkedIn.
Malpass noted that the explosion of US government debt is draining and concentrating global resources into a narrow set of US government priorities and beneficiaries.
The key problems of the American economy are the lack of new investment amid a huge growth in public spending resulting in an unprecedented debt-to-GDP ratio as well as short-term financing crowding out small businesses, the post said.
According to the International Monetary Fund, the US public debt will exceed 123% of GDP in 2024 and reach nearly 134% in 2029.
The US debt currently exceeds $34.5 trillion.
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