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Have the trade wars and announced budget cuts really improved the economic health of the United States? Does Donald Trump’s grandiloquent speech conceal an inability to stop the country’s financial deterioration? Moody’s has downgraded the US sovereign rating, a sign that the numbers do not lie. This essential indicator reveals that the pace of reforms does not keep up with that of economic damage. The question arises: is the president a true magician or just an illusionist facing the collapse of the American economy?
In brief
- Moody’s downgrades the US rating to Aa1, warning of a debt that has become too massive.
- US debt will reach 134% of GDP by 2035, according to official projections.
- Interest charges could absorb 30% of federal revenues within ten years.
Moody’s downgrades the United States: a warning signal for the global economy
On May 16, 2025, Moody’s lowered the sovereign rating of the United States, dropping from “Aaa” to “Aa1”. This downgrade, the latest among the major rating agencies, marks a historic milestone. It reflects a loss of confidence in a debt considered too heavy and persistent deficits. Moody’s states:
Successive US administrations and Congress have failed to reverse the trend of annual budget deficits and rising interest costs.
This downgrade is not just symbolic. It warns investors and could raise the financing cost for the United States. This increase could impact the entire world economy, where the dollar remains the cornerstone. Moreover, this signal weakens America’s position as a global economic leader, casting a shadow over the country’s credibility.
Stephen Moore, a Trump ally, strongly criticizes this decision, calling the rating downgrade “scandalous”.
The markets reacted by a rise in Treasury bond yields, reflecting the prevailing nervousness. The challenge is huge: to break this spiral before it permanently hampers the American and global economy.
American debt: a burden threatening economic stability
The weight of American debt is at the heart of concerns. Currently, the federal debt exceeds 36 trillion dollars. Moody’s predicts it will reach 134% of GDP by 2035, up from 98% in 2024. This surge is driven by growing deficits, rising mandatory expenditures especially interest payments, and stagnant tax revenues.
The report specifies that interest charges will go from 18% of federal revenues in 2024 to nearly 30% in 2035. This weight burdens the budget and limits the room for bold economic policies. Moreover, if the extension of the 2017 tax cuts is confirmed, it could further increase deficits, adding nearly 4 trillion dollars over ten years.
These figures reflect an American economy increasingly strangled by its debt. Consequently, the ability to invest in growth, innovation, and competitiveness is challenged. This trend could lead to a gradual decline in living standards and a weakening of American economic institutions.
American economy today: tensions and future prospects
The American economy is going through a delicate period. The trade war initiated by Trump, with its tariffs, has created tensions disrupting global supply chains. Furthermore, budget cuts aim to reduce public spending, but their impact is uncertain.
The inability to stabilize the debt fuels concerns. Efforts to reduce deficits face political opposition and structural constraints. The fragility of the financial system is felt, particularly with rising bond yields. This context creates an atmosphere of uncertainty for businesses and consumers.
- Federal debt: 36 trillion dollars (2025);
- Debt-to-GDP ratio: 98% in 2024, projected at 134% in 2035;
- Interest burden: 18% of revenues in 2024, 30% projected in 2035;
- Fiscal impact of tax cuts: +4 trillion over ten years;
- Expected inflation: 2.9% in 2024.
Faced with these challenges, voices are rising to advocate an alternative to mere budget cuts. Among them, bitcoin is gaining popularity as a safe haven and diversification tool. Donald Trump himself seems to pay particular attention to this new factor, which could influence economic strategy in the coming years.
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La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
