US Sovereign Debt Levels, Is The US Deficit The Next Financial Crises?

US SOVEREIGN DEBT
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Introduction
In 2009, the US sovereign federal debt was $9.1 trillion. At the end of 2018, the debt was at 21 trillion, and it is expected to hit $30 trillion by the year 2025 CITATION Luo18 \l 1033 (Xuan, 2018). At that level, the interest rates might be so high that the government cannot cover them from fiscal revenue. At the moment, the interest rates have surpassed many other mandatory programs and soon they the American government will spend more on the interest of the debt than what it spends on the military. For all of fiscal 2018, net interest on the public debt rose by $62 billion to about $371 billion CITATION Rac181 \l 1033 (Layne, 2018). In the next decade, the interest on the debt is likely to hit $7 trillion CITATION Rac181 \l 1033 (Layne, 2018). The level of the US debt is raising concerns among many economists citing that it is fast approaching unsustainable levels and many pointing out that it could spark the next financial meltdown. The US economy is robust, but the trajectory of the debt points to the likelihood of the US inability to repay it and the interest earned on the principal. If the US is unable to repay the loan or the interests earned, the economy can tumble. At the moment the debt is racing to unsustainable levels and economists have raised concerns over the economic and diplomatic issues it could cause should it become unpayable. They have also pointed out many effects of the ballooning debt especially on the economy. The political class has either and or ignored these warnings have done little to tame the debt. Some economists argue that the debt is likely to lead to the next financial crisis though others think it is not a problem.
The national debt is mainly classified into two; intergovernmental debt and public debt. Intergovernmental debt is the debt owed to federal agencies such as Social Security Trust Fund whilst the public debt is owed to the public, i.e., people and agencies outside the federal government such as individuals, corporations, the Federal Reserve System, and foreign, state and local governments. The debt can also be classified into external and internal debt using local (domestic) and foreign criterion. External debt is owed to foreign investors (governments, foreign corporations, individuals from other countries) across the world. Internal debt is owed to the citizens of the United States either through government agencies such as Social Security Trust Fund or through private investment channels such as hedge funds.
Who is it owed to?
As of December 2018, when the sovereign debt totaled $21.9 trillion, $5.9 trillion was an intergovernmental debt which accounts for 27 percent of the debt. About 230 federal agencies own the debt and earn interest on it. Federal agencies like the Social Securities Trust Fund are the main owners of the debt. Through their revenues, they buy the government’s treasuries. Other federal agencies like Medicare, military retirement funds also own various percentages of the national debt. Some individual investors through either directly or through hedge funds and other financial institutions also own a piece of the national debt. Other institutions which own a piece of the national d...