US debt eclipses economy, reaching $16 trillion
The data released by the Treasury Department on Tuesday showed that the government debt has surpassed $16 trillion for the first time in American history.
The news comes as Republicans and Democrats formally nominate their presidential candidates, and the official announcement comes on the first day of the Democratic National Convention.
“This is a grim landmark for the United States. Yet the president seems strangely unconcerned,” said Sen. Jeff Sessions of the Senate Budget Committee.
Each day, the debt grows by roughly $3.5 billion, or about $2 million per minute.
Twelve years ago, before the election of George Bush, the debt stood at $5.6 trillion. In the months before President Obama took office, the debt was $9.6 trillion. During the last presidency, it has increased by $6.4 trillion – two-thirds of its 2008 amount. The current president has overseen the largest debt explosion in US history.
This year marks the fourth consecutive year with a $1 trillion budget shortfall.
A top adviser to President Obama said the commander in chief had a “plausible plan” to stabilize the debt – without reducing it.
“You can’t balance the budget in the short term because to do that would be to ratchet down the economy,” adviser David Axelrod told Fox News on Sunday.
About 30 per cent of the total public debt is intragovernmental holdings, including money borrowed from Social Security’s trust fund.
“The national debt is certainly a ticking time bomb. There’s no question that if we don’t do something about it, it’s going off,” said Robert Bixby, the executive director of the Concord Coalition, an NGO promoting a balanced budget. “We’re spending about $200 billion on interest now. That’s much more than we’re spending on operations in Afghanistan, more than we’re spending on Medicaid.”
As the US debt makes history, the first group of baby boomers is now retiring and relying on government entitlements to get by.
While presidential candidate Mitt Romney, gave his speech at the RNC last week, a national debt clock ticked behind him to fill the convention's attendees with fear of a looming financial catastrophe.
The DNC is unlikely to feature a similar exhibit – but the federal government will likely announce its $16 trillion debt during the heat of the convention in North Carolina.