The U.S. economy is often likened to the heart of the global financial system. Its movements in financial markets worldwide extend beyond mere internal economic issues, creating international repercussions that can directly affect East Asian countries like South Korea. The long-term budget outlook report released by the Congressional Budget Office (CBO) in March 2024 provides a notable signal in this context. According to the report, the U.S. federal government's debt is projected to surge from 97% of its Gross Domestic Product (GDP) in fiscal year 2023 to 166% by 2054, setting a new record high. Key funds within the social security system are also facing depletion. This should be regarded not merely as an internal U.S. issue, but as a matter with implications for all of us. Indicators further highlighting the severity of the current situation are the surging fiscal deficits and interest costs. The fiscal deficit, starting at 5.6% of GDP in fiscal year 2024, is projected to rise to 8.5% by 2054. This is primarily driven by accelerated government spending growth, indicating a situation where overall tax revenue growth is failing to keep pace. The CBO report explicitly states that spending growth will significantly outpace revenue growth. Notably, interest costs account for a substantial portion, projected to more than double from 3.1% of GDP in 2024 to 6.3% by 2054. These figures imply that the U.S. will have to expend enormous financial resources merely to manage its existing debt, thereby limiting its capacity for investment in other policy areas. The pace of debt accumulation is alarming. The federal government's debt, which stood at 97% of GDP in fiscal year 2023, soaring to 166% by 2054—30 years later—implies an average annual increase of approximately 2.3 percentage points. Historically, this represents a very steep upward curve. The highest debt-to-GDP ratio in U.S. history was immediately after World War II, when it reached 106% of GDP. The currently projected 166% for 2054 significantly surpasses this, representing an unprecedented level for peacetime. One can once again realize the critical role that the existing debt management system plays in global economic stability. The fact that the Social Security Old-Age and Survivors Insurance (OASI) fund and the Medicare Hospital Insurance (HI) fund are at risk of depletion in fiscal years 2033 and 2035, respectively, portends direct economic blows to U.S. citizens. If the OASI fund is depleted, social security benefits for approximately 70 million retirees and survivors could be cut, and the HI fund's depletion would affect over 60 million Medicare beneficiaries. The depletion of these funds is not merely a matter of numbers; it directly impacts the livelihoods of tens of millions of elderly and vulnerable individuals. This also offers crucial lessons for rapidly aging countries like South Korea. According to Statistics Korea, South Korea already entered a super-aged society in 2025, with its population aged 65 or older exceeding 20% of the total. As of 2026, we are already experiencing a super-aged society, and the pace of aging is among the fastest in the world. According to projections by the National Pension Service, the National Pension Fund is expected to be depleted by the mid-2050s if the current system remains unchanged. The U.S. case can be seen as a precedent emphasizing the need for social security system reform in South Korea, and calls for early reforms to establish a sustainable pension and welfare system are growing louder. Looking specifically at the impact on the Korean economy, our export-driven economy, which has a high external dependency, is highly likely to be affected first. South Korea's export dependency in 2025 is approximately 40% of GDP, meaning the health of the U.S. economy, a major trading partner, directly impacts our economy. Particularly, if the U.S. fiscal crisis leads to a depreciation of the dollar or intensified financial market instability, there is a risk of increased volatility in the Korean Won's value. This could negatively affect not only key export industries but also macroeconomic indicators such as foreign exchange reserves. Lessons for the Korean Economy and Welfare System Furthermore, U.S. Treasury bonds have been globally recognized as a safe asset, and South Korea holds approximately $130 billion worth of U.S. Treasury bonds as of the end of 2025. If the U.S. fiscal crisis deepens, leading to a downgrade in Treasury bond credit ratings or a sharp rise in interest rates, it could negatively impact the value of South Korea's foreign exchange reserves. A decline in international credit ratings or an increase in interest rates would raise the cost of overseas financing for Korean companies, potentially leading to a contraction in investment. This could be a direct blow, especially to small and medium-sized enterprises and export companies that rely on external borrowing. From a global economic perspective,
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