At a time when the debate on public debt in France is becoming increasingly tense, the situation in the United States does not seem to attract much attention. However, the results are not very bright and the threats to the world economy are therefore real.  The federal debt in 2024, to which we would have to add the debt of the federated states, if we want to make comparisons, reached 98% of GDP in 2024 and the forecasts for 2035, with no change in policy, 125%. The federal deficit in 2024 amounted to 6.4% of GDP and could reach 9% in 2035.

In the coming years, 3,300 billion dollars will therefore be added to the current debt, the cost of which has reached 880 billion dollars, i.e. more than ten times the annual burden of the French public debt. It is therefore not surprising that Moody's, after Fitch and Standard & Poor's, has withdrawn the AAA rating from the world's largest economy. The consequences have begun to be felt on interest rates. The ten-year rate on federal bonds was 4.5% and those on 20-year bonds were 5.2%. Even if inflation is higher than in France, the interest rate differential for all these maturities exceeds 125 basis points and with Germany, is close to 200 basis points. 

The financial markets have not remained indifferent. Announcements about tariffs, sometimes, but not always, followed by U-turns, and their consequences on the lives of American companies have worried Wall Street as well as the weak credibility of measures intended to reduce public deficits. The savings and job cuts, sometimes overturned by the courts, as part of the DOGE program, led by Elon Musk, have not proved to be up to the stakes. The federal budget has just been narrowly passed, by a majority of one vote, by the House of Representatives and still needs to be approved by the Senate. Finally, the debt ceiling will have to be raised by Congress before the end of the year, which is still a source of great tension.

Few investors were convinced that the tariffs would bring in sufficient revenue. As for growth, already affected by the fall in GDP in the 1st quarter, which generates tax revenues, it is likely to be slowed down by the uncertainty resulting from the multiple contradictory announcements of American leaders. In addition, geopolitical choices have aroused hostility and in recent weeks we have been witnessing a "Tesla effect", with foreign investors having less interest in acquiring dollar-denominated assets, like motorists who no longer want to buy the cars produced by Elon Musk's company. He has just drawn the conclusions since he will leave all official functions at the end of this month.

Central banks, such as the People's Bank of China, are gradually reducing the share of the US currency in their reserves. These are mainly composed of securities issued by the State. This translates into bond issues that attract fewer subscribers with the consequent rise in interest rates, further increasing future public charges. This movement is gradual because no one has an interest, through brutal action, in generating a financial crisis that would hit the whole world. But it is irreversible. It benefited other currencies and gold, the safe haven par excellence,

Aware of these risks, the US administration is considering a relaxation of prudential rules that would make it possible, contrary to what is provided for in the Basel III Accords, to classify public debt securities on banks' balance sheets in the category of assets that ensure their financial soundness. If such a measure were adopted, it could alert on the fragility of the banking system, already highlighted with the bankruptcy of Silicon Valley Bank in 2023, and therefore on the dollar.

The indifference that this situation arouses in Europe is in contradiction with the assessment of the respective situations of the two continents. They highlight a European stall, real but limited to a few activities deemed essential, and they refrain from mentioning the deterioration of American public finances while their state is the subject of alarmist declarations, particularly in France. In the same way, no judgment is made on the abandonment of environmental policies by the American administration, which will increase the country's climate debt, while in Europe costly investments and mechanisms are put in place. 

To get unpopular measures adopted, it is usual to dramatize the situations that one wants to remedy. This is what is happening in France with the multiplication of studies and reports, including the latest one by the Court of Auditors, denouncing a catastrophic situation that would jeopardize the country's social security and solvency. Thus, to remedy this, tax increases would be made (social VAT, abolition of tax advantages on pensions) in the hope, given the seriousness of the situation, that they would be accepted.

But the figures published by INSEE on growth in the 1st quarter show the differences with the American situation. The household savings rate broke a new record (18.8% of gross disposable income), almost four times higher than in the United States, and a financial savings rate of 9.8%. The State thus has no difficulty in financing its deficit. Since the beginning of the year, subscriptions to medium- and long-term debt issues have been three times higher than the amounts finally allocated, again in contradiction with the American situation where, recently, an issue of 20-year bonds had difficulty finding a buyer.

Finally, this excessive dramatization of the public finance situation, while having little effect on the State's ability to find the necessary financing on the markets, has a negative impact on activity by creating a climate of concern that therefore weighs on public revenues. The revised growth figures for the 1st quarter show this. Domestic demand fell (-0.1%) as did the contribution of foreign trade (-0.8% against -0.4% estimated). Despite a record self-financing rate, exceeding 90% over the past year, business investment has picked up very weakly since the beginning of the year (+0.2%) after a 2.4% decline in 2024. Only the increase in business inventories (+1.0% compared to +0.5% in the first estimate) makes it possible, artificially, to avoid a contraction in GDP. But this abnormal level will weigh on activity in the coming months.

The divergence of assessments of American and French debts has often been justified by the role of the dollar, which would constitute a protection. This argument does not hold for two reasons. First of all, the dollar has never prevented the country from experiencing major financial crises, such as the sub-prime crisis in 2007. Secondly, because the euro, without having gained the same status on the international financial scene as the American currency, is now a solid and credible currency, which favours the financing of the States that have adopted it.

The French government should therefore take into account the confidence of the markets that is shown with each issue, abandon its policy of dramatization and adopt fiscal measures and operating savings staggered over time to return to a lower level of debt. This would not exempt him from remaining vigilant about the threat posed by American debt to the world economy.