The economist Peter Morici broken down what the national debt is, why he shot more than $ 34 billion and what he means to Americans.
The national debt of the United States is rising at a fast pace and has not shown signs of deceleration, despite the growing criticism of massive government spending levels.
The national debt, which measures what the United States owes its creditors, fell to $ 36,212,761,63,585.77 as of April 15, according to the last numbers published by the Department of the Treasury. That was reduced to about $ 2.2 billion of the figure reported the previous day.
In comparison, only four decades ago, the national debt was around $ 907 billion.
The perspective of the federal debt level is gloomy, and economists are increasingly smiling at the alarm on the torrid rhythm of the spending of Congress and the White House. The interest payments on the government’s fiscal year debt, which begins in October, now exceeds the costs of Medicare and the defense budget.
High deficits to boost public debt at the level of registration in 4 years
The last findings of the Congress Budget Office indicate that national debt will grow to amazing $ 54 billion in the next decade, the result of a population that ages and increased federal costs of medical care. The highest interest rates also aggravate the pain of a higher debt.
If that debt materializes, it could risk the economic position of the United States in the world.
“The fiscal perspective of the United States is more dangerous and discouraging than ever, threatening our economy and the next generation,” said Michael Peterson, CEO of the Peter G. Peterson Foundation that advocates the reduction of the federal deficit. “This is not the future that none of us want, and it is not a way of directing a great nation like ours.”
Large deficits, high interest rates that make federal debt less sustainable
The relentless increase is what led Fitch Ratings to issue a surprise reduction of the nation’s long -term credit score in mid -2023. The agency reduced the United States debt in a notch, snatching its pristine AAA rating in exchange for a AA+rating. When making the decision, Fitch cited the alarm on the deteriorated finances of the country and expressed concern about the government’s ability to address the burden of balloons in the midst of acute political divisions.
“This is a warning through the United States government arch that you need to correct your fiscal ship,” they told Fox Business of Sean Snaith, economist at the University of Florida Central. “You can’t spend trillions of dollars more than you have in income every year and not expect bad consequences.”
The peak in the national debt follows an expenditure burst by President Biden and democratic legislators.
As of September 2022, Biden had already approved approximately $ 4.8 trillion on loans, including $ 1.85 billion for a COVID relief measure called American Rescue Plan and $ 370 billion for the Bipartisan Infrastructure Law Project, according to the Committee of a RESPONSIBLE FEDERAL BUDGET (CRFB), a group that advocates the reduction of the reduction in the reduction of the reduction of the deficit.
The United States is paying a record amount of interest on its national debt
While that is approximately half of the $ 7.5 billion that former President Donald Trump added to the deficit while he was in office, it is much more than $ 2.5 trump billion he had approved at that same point during his term.
Biden has repeatedly defended the expense of his administration and boasted to reduce the deficit by $ 1.7 billion.
“I could take into account in parentheses: in my first two years, I reduced the debt at $ 1.7 billion. No president has done that,” Biden said recently.
However, this figure refers to a reduction in the national deficit between fiscal years 2020 and 2022; While the deficit was reduced during that period of time, that is due in large part to the fact that emergency measures were placed during the COVID-19 pandemic expired.
The White House has also tried to blame Republicans for the astronomical ascent in debt in recent years.
“This is the drip debt, overwhelmingly promoted by the repeated republican gifts biased to the big corporations and the rich one,” said Michael Kikukawa, secretary of the White House assistant press, in a statement provided to Fox Business after the debt exceeded $ 34 billion.
The US national debt. UU. Superda $ 34t for the first time in history
Even more worrying is that the increase in interest rates during the last year has made the cost of attending national debt more expensive.
That is because as interest rates increase, Federal Government’s indebtedness costs On your debt will also increase. In fact, it is projected that interest payments on national debt will be the fastest growing part of the federal budget in the next three decades, according to the CRFB.
The United States Capitol in Washington, DC (Julia Nikhinson / Bloomberg through Getty Images / Getty Images)
Click here to read more on Fox Business
Payments are expected to triple from almost $ 475 billion in fiscal year 2022 to a surprising $ 1.4 billion in 2032. By 2053, interest payments are projected to increase to $ 5.4 billion. To put that in perspective, that will be more than what the United States spends on Social Security, Medicare, Medicaid and all other mandatory and discretionary expense programs.
“We are clearly on an unsustainable fiscal path,” said the president of CRFB, Maya Macguineas. “We need to do better.”
While the debt has been a source of concern between politicians and budget hawks, how worried should the rapid rhythm of the nation loans be?
Experts say that the greater the debt, the more the United States pays in interest costs every year. These expenses can eclipse important public investments that feed economic growth, areas such as education, research and development and infrastructure.
“A nation full of debt will have less to invest in its own future,” said the Peter G. Peterson Foundation.
A PEW Research Center survey published in 2023 found that 57% of Americans think that reducing the budget deficit should be a priority for the President and Congress, compared to only 45% of the previous year.
