The world economy could be on the brink of collapse once again as the US is barrelling towards another “devastating” financial crash.
The US federal deficit is expected to double to a huge £1.58trillion ($2trillion) this year alone, sending national debt skyrocketing to £26.4trillion ($33trillion).
It has triggered fears that Joe Biden’s government will be forced to shut down if they are unable to pass a new budget or stopgap to stem the alarming financial flow.
This comes after the White House pleaded with Congress to accept a short-term funding extension to avoid such a disastrous government shutdown which would come into force in a matter of weeks.
The US is home to the world’s largest economy, while the US dollar has been the world’s principal reserve currency since the end of World War II and is the most widely used currency for international trade.
But Steve Moore, one of Donald Trump’s former economic advisors, has warned a US financial crash could be imminent.
He told GB News: “I do believe if we just continue to run up the deficit then there will be a financial crisis at some point.
“I don’t know if that’s going to happen in three weeks or three months or three years, but this cannot continue.
“This is just inflating a bubble that’s getting bigger and bigger and bigger and bigger. And at some point, if you don’t start deflating from that bubble, it pops. And that’s the real danger.”
Moore also warned lessons need to be learned from the last major financial crash in 2007-2008 – the worst of its kind since the Great Depression of 1929.
He urged the US government to act now to avoid getting close to a similar and disastrous scenario but fears not enough is being done to manage the spiraling debt.
Moore continued: “We should learn from 2008 when we had the last big bubble pop, that was devastating.
“We had massive business failures. You had the major banks that needed major bailouts from the government. We had the unemployment rate double and triple.
“Just like a cancer cell, you’d better treat it before it metastasizes. And we’re not doing that with our debt. We’re just whistling Dixie and pretending it doesn’t exist.”
The US economy has remained fairly strong through a difficult couple of years, but the federal deficit has shown no signs of shrinking meaning Americans could be hit with larger interest payments and lower tax receipts.
Joe Biden, who is already facing questions over his ability to serve a second White House term, could see the sky-high deficit dent his chances during the presidential election after he attempted to take credit for reining in the budget.
Figures from the Congressional Budget Office show despite the current $2trillion spending imbalance, which was nearly 50 percent higher in 2021, surging to £2.2trillion ($2.8trillion) – triggered by the huge spending that was required during the Covid pandemic.