High time to raise interest rate

Speaking in the run up to the gathering of the great and good of policy making and finance, IMF chief Christine Lagarde has called the outlook for growth "precarious" and warned that years of high public debt and low interest rates over the past decade have left many countries with limited room to act when the next downturn arrives.

Read more at https://www.channelnewsasia.com/news/business/take-five--panic-over--world-markets-themes-for-the-week-ahead-11418498

Debt, living on debt, is the opiate of the new western economy.  All their economic and monetary policies are debt based, printing money to buy debt after debt, and kicking the can further down the road. How long can this last, how much more money to print before everything collapses under the weight of debt?

Below is a summary of American debt compiled by a Kimberly Amadeo.
 
'The U.S. debt was $22 trillion as of February 11, 2019. Most headlines focus on how much the United States owes China, one of the largest foreign owners.... In January 2019, China owned $1.126 trillion of U.S. debt. It's the largest foreign holder of U.S. Treasury securities. The second largest holder is Japan at $1.07 trillion....That's when it increased its holdings to $699 billion, outpacing the United Kingdom's $640 billion. 

Brazil is the third largest holder, with $305 billion in Treasurys. Ireland owns $270 billion, while the United Kingdom owns $272 billion.

Luxembourg is sixth at $218 billion. The Bureau of International Settlements believes it is a front for sovereign wealth funds and hedge funds whose owners don't want to reveal their positions. So are the Cayman Islands, holding $208 billion, and Belgium at $192 billion.

After Luxembourg, the next largest holders are Switzerland, Hong Kong, Taiwan, Saudi Arabia, and India. They each hold between $145 billion and $228 billion.'

The American debt has reached such enormous proportion that everything the Americans are doing is revolving around servicing this mountain of debt. One key point to note is that US Treasury cannot afford to raise interest rate as every 1% increase in interest rate would mean another US$220 billion of interest to pay. This sum is equivalent to the GDP of many countries around the world, including that of Singapore. The Americans cannot afford to continue to service their debt, which at an average of 2% of T bills will amount to US$440 b! A 1% increase in interest rate will balloon the interest to be paid to US$660 b! This is just to service the interest alone, not repaying the principle owed, an amount equal to the American defence budget.

While the rest of the world is held ransom by the Americans to live with low interest rate, there would be a time when the rest of the world, eg EU, China may decide to take the initiative to raise interest rate and sink the American economy into the abyss with their debt mountain. Living on low interest rate to drive the economy may no longer be an option as Lagarde has said above. The Americans would not and could not raise interest rate for their own good. The others can, just like FAA would not call out Boeing 737 Max, China's CAA could. China or EU just do it, make the first move to raise interest rates.

When would the next economic downturn come and bring down the world economy with it?