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US may peg national debt to GDP

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The US government is trying to solve the long-lasted and painful problem of soaring public debt. Recently, the US Republican Party in Congress has proposed tying the debt to the county’s GDP. In recent years, the government debt has been settling higher, posing considerable risks for the US economy. Therefore, the US Congress was forced to increase the debt ceiling. "The law establishes a debt ceiling in the form of a number in dollar terms, which makes no sense. Practically speaking, we think that this should be the debt-to-GDP ratio," Republican Brian Fitzpatrick, a member of the House of Representatives of the US Congress, said. The politician noted that the US public debt was 40% of the country’s GDP in 2008 while it surged to 125% in 2023. "When you see a kid with a spending problem, you pay their bills and put away their credit card," Fitzpatrick added. Notably, US external debt is increasing by $6.4 billion on a daily basis. Thus, the US Treasury had to take emergency measures to prevent default in the country. Meanwhile, the national debt ceiling of $31.4 trillion has been reached.

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