US National Debt Reaches $35T
On Monday, the US Dept. of the Treasury's daily report showed that the sovereign debt owed by the US has reached $35T for the first time in the country's history....
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Facts
- On Monday, the US Dept. of the Treasury's daily report showed that the sovereign debt owed by the US has reached $35T for the first time in the country's history.[1]
- In June, the Congressional Budget Office estimated that the federal deficit would be $1.9T in 2024, which they project would grow to $2.8T by 2034. Debt held by the public could be a record-breaking 122% of gross domestic product (GDP) by 2034.[2]
- The national debt reached $33T in Sept. 2023 and crossed the $34T mark in Jan. 2024. The $1.9T fiscal shortfall the government is currently facing is the third largest in US history.[3]
- The $1T mark was first passed in 1981. Exacerbating the current situation, the trustees of Medicare said that the fund for that program could be exhausted by 2036 — with the Social Security trust fund slated to run dry by 2035.[4]
- Interest payments needed to sustain the debt are also projected to reach 3.2% of the GDP in 2024, the highest since 1991, while Medicare and Medicaid could cost over 10% of the GDP this year.[5]
- In January, the House Budget Committee voted to assemble a bipartisan group that would craft a plan to keep the debt-to-GDP ratio below 100% within 10 years.[4]
Sources: [1]New York Times, [2]Congressional Budget Office, [3]FOX News, [4]Washington Examiner and [5]Bloomberg.
Narratives
- Republican narrative, as provided by Daily Wire. When facing a shortfall, the common sense answer is to reduce spending, but Democrats have decided to tax their way out of this crisis to fuel an inflationary agenda. Fiscal discipline is the only solution, not wanton tax-and-spend policies, and America needs real leadership to bear down on wasteful spending and keep the coffers full. This wasteful deficit spending is not sustainable.
- Democratic narrative, as provided by The White House. The Republicans under Trump have gone from deficit hawks to massive spenders. Their agenda, which involves extending Trump's tax cuts for the rich and making Medicare fork over more money to Big Pharma, is designed to deprive the government of much-needed funding, not solve the debt problem whatsoever. Their 'starve the beast' strategy has made America more indebted.
- Cynical narrative, as provided by Reason.com. Every politician loves to talk about the national debt when convenient, but no politician actually seems to want to reduce it. Economists agree that the US is heading off a fiscal cliff, but the solutions for the problem are too unpalatable for any major party to discuss. Tackling the debt will require reforming Social Security and Medicare — political suicide — and other hard-nosed solutions.
