The economist predicted a weakening of the dollar due to the US government debt

The American economy is facing serious structural problems related to the growth of public debt, and a large-scale depreciation of the dollar may be the way out of the situation. Maxim Chirkov, Associate Professor of the Department of Economic Policy and Economic Measurements at GUU, told Izvestia on July 4.

Earlier it was reported that on July 3, the House of Representatives of the US Congress adopted a "single, large, beautiful" bill on taxes and government expenditures of the head of the White House. It was clarified that 218 congressmen supported the initiative, while 214 voted against it.

"Trump is trying in one way or another to smooth out the consequences of what has been happening in the American economy for many decades. But so far, apparently, this is not possible and it is necessary to raise the ceiling of the US government debt, because the American economy simply cannot exist without such a doping in the form of borrowing," Chirkov said.

According to him, Trump is taking certain steps aimed at mitigating current problems, especially in the area of spending cuts. This will affect not just millions, but tens of millions of people in the United States under some programs. Nevertheless, the American leader is doing what is necessary. The era when the American economy and the entire Western world could exist through uncontrolled borrowing is coming to an end.

According to the expert, the main problem is the inability to service current debt without drastic steps.

"Most likely, there will be a serious depreciation of the dollar. This is necessary to reduce the real burden of debt and avoid a large-scale default. The external public debt must be reduced significantly, otherwise the economy will not be able to cope with payments. Now the United States is coming out of the crisis in manual mode, but the problem can no longer be ignored," Chirkov summed up.

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On May 15, Bloomberg reported on the risk of an increase in the US budget deficit to $5.2 trillion due to Trump's project. It was specified that the project itself would cost the treasury $ 3.8 trillion. According to brokerage companies, due to tax cuts, the legislation will "significantly" expand the budget deficit in the short term — by 0.2% of GDP in fiscal year 2025 and by about 0.9% of GDP in 2026.