US' mounting debt and rising inflation contrast Biden's claim of economic growth

Biden on Economy: United States President Joe Biden recently shed light on positive impact of immigration on US economy during a fundraising event for his 2024 re-election campaign.

He attributed growth of US economy, in part, to contributions of immigrants and contrasted this with what he described as xenophobia hindering economic growth of countries like China, Japan, Russia, and India.

International Monetary Fund (IMF) forecasted varying levels of economic growth for se countries in 2024, with Japan experiencing slower growth at 0.9 per cent and India showing stronger growth at 6.8 per cent. In comparison, IMF predicted United States to grow at 2.7 per cent, with immigration playing a role in expanding labour force and contributing to economic performance.

Immigration has become a significant issue for US voters ahe of upcoming presidential election, with concerns about irregular migration taking centre stage.

Biden, who has criticised his Republican opponent Donald Trump's anti-immigrant rhetoric, has prioritised building economic and political relations with countries such as Japan and India to counter global powers like China and Russia.

Economy in Shambles

US Economy is slowing down, nation reported GDP growth of 1.6 per cent in Q1, which was far below estimation. But it is not only growth which has caused heaches for economy watchers, US debt has also emerged as pain point.

warnings from various institutions about US national debt reaching a tipping point and potentially leing to a crisis echo concerns about debt's unprecedented size and trajectory. Currently, national debt is nearly equal to entire US economy, standing at roughly $27.3 trillion, and is projected to double within next thirty years.

Daunting Debt

king of banking, Jamie Dimon, CEO of JPMorgan Chase, and ors warn of a looming crisis if action isn't taken soon to dress mounting debt, which has surpassed $34 trillion, with a debt-to-GDP ratio of around 120 per cent.

cautionary tales include economic turmoil experienced by former UK Prime Minister Liz Truss in 2022, whose rical economic proposal of tax cuts and borrowing triggered market chaos, leing to her resignation after just six weeks in office. re are fears that US could face a similar crisis if debt continues to escalate unchecked.

Officials from institutions such as International Monetary Fund (IMF), Congressional Budget Office (CBO), and Goldman Sachs have raised concerns about country's soaring debt. y warn that excessive public spending and borrowing could overheat economy and increase funding costs globally, potentially leing to a crisis reminiscent of Truss's experience.

Looming Government Shutdowns Become Routine

Just last month, US government narrowly averted a spectre of yet anor government shutdown that was looming large. disagreements between US Senate and House over funding measures have prompted fears of multiple shutdowns in recent past. Memories of record-setting 35-day shutdown in late 2018 and early 2019, triggered by disputes over funding for a border wall, remain fresh in minds of lawmakers and citizens alike.

United States government operates on 12 appropriations bills passed annually by Congress. However, when se bills aren't opted by start of fiscal year on October 1, temporary extensions known as continuing resolutions (CR) are passed to keep government running. If Congress fails to agree on a CR, a funding gap occurs, leing to shutdown of federal agencies deemed non-essential.

On March 23, US Congress overwhelmingly passed a $1.2 trillion budget bill, keeping government funded through a fiscal year that began six months ago and sending it to President Joe Biden to sign into law and avert a partial shutdown.