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19 Sep, 2023 12:32

US national debt passes new landmark

The country’s gross financial liabilities topped $33 trillion for the first time on record
US national debt passes new landmark

US national debt has hit a record high of $33 trillion, according to a daily report detailing the nation’s balance sheet published by the Treasury Department on Monday.

The real-time US debt clock website has put the actual debt level at $33.04 trillion, and the debt to GDP ratio at 122.4%.

Commenting on the reading, Treasury Secretary Janet Yellen claimed that interest costs on the current debt are manageable. Nevertheless, she urged policymakers to act swiftly.

The president [Joe Biden] has proposed a series of measures that would reduce our deficits over time while investing in the economy,” she told CNBC, “and this is something we need to do going forward.” She did not elaborate on these measures.

US debt spiked after Biden approved a bill in early June that removed the $31.4 trillion debt ceiling for two years, effectively allowing the government to keep borrowing without limits through 2024. The ceiling was suspended following repeated warnings from the Treasury that unless the step was taken, the country would default on its obligations.

As a result, debt spiked to $32 trillion less than two weeks after the bill was approved, and has grown ever since. By comparison, four decades ago, national debt stood at around $907 billion. According to projections from the Congressional Budget Office, at its current pace, US national debt is on track to nearly double in size within the next three decades.

Maya MacGuineas, the president of the Committee for a Responsible Federal Budget (CRFB), says the latest milestone is worrisome.

The United States has hit a new milestone that no one will be proud of: our gross national debt just surpassed $33 trillion. Debt held by the public, meanwhile, recently surpassed $26 trillion. We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous,” she told FOX Business.

Her statement was echoed by Sean Snaith, an economist at the University of Central Florida, who told the news outlet that the reading is “a warning shot across the US government’s bow that it needs to right its fiscal ship.

You can’t just spend trillions of dollars more than you have in revenue every year and expect no ill consequences,” he warned.

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