US Debt Skyrockets Past $40 Trillion, Global Investors on High Alert

The United States has reached a new record high in national debt, surpassing $40 trillion. Economist Liu Baocheng warns that this massive debt will lead to higher borrowing costs and erode consumer purchasing power.

Liu, dean of the Center for International Business Ethics at the University of International Business and Economics, explained in an interview with CGTN that rising debt creates a 'spiral effect.' This is similar to how a household managing its finances would struggle when dealing with a large deficit.

'This is really a warning sign,' Liu said. 'It's like a household managing their finance... When they have a larger deficit, they have to buy more.'

Liu believes that investors will need to rearrange their bond portfolios in response to the rising debt levels. This could lead to a decrease in the value of existing bonds and create further pressure on the US dollar.