The total national debt of the United States surpassed $33 trillion for the first time in history, with criticism mounting against the Biden administration for its “reckless spending” policies.
Total U.S. debt was $33.04 trillion on Sept. 15, according to data from the U.S. Treasury Department. This is a rapid buildup given that on June 15, total U.S. debt was at $32.04 trillion—indicating that debt rose by $1 trillion in a span of just three months. While the gross national debt exceeded $33 trillion, “debt held by the public, meanwhile, recently surpassed $26 trillion,” Maya MacGuineas, president of government watchdog Committee for a Responsible Federal Budget (CRFB), said in a Sept. 18 statement. “We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous.”
“Instead of hearing about solutions, we hear promises of which programs our leaders are unwilling to touch and which taxes they are unwilling to raise,” she said. “Getting the debt under control will require taking a serious look at health care, Social Security, and the tax code.”
The new milestone comes as the CRFB recently pointed out that the federal budget deficit totaled $2 trillion over the past year. The Congressional Budget Office (CBO) had predicted the deficit to come to $2 trillion for the current fiscal, double the $1 trillion in the last fiscal year.
Federal funding is set to run out on Sept. 30, after which the government may shut down. Republicans recently agreed on an interim spending bill to avoid the scenario from playing out.
The bill includes cutting down government spending on domestic agencies by 8 percent and resumption of border wall construction. As such, the bill is not expected to pass the Senate which is under the control of Democrats.
“Our national debt just hit OVER $33 TRILLION. Joe Biden’s legacy is one of historic failures. We must reverse course and think about the impacts this president’s reckless spending will have on future generations,” Sen. Roger Marshall (R-Ks.) said in a post on X on Sept. 19.
Threat of High Debt
Economic experts have raised alarm bells about the United States’s growing debt levels, warning that uncontrolled debt growth could eventually doom the country.During a May 4 testimony before the Senate Budget Committee, Brian Riedl, a senior fellow at the Manhattan Institute for Policy Research, called soaring debt and interest rates a “ticking time bomb.” He asked Congress to focus on “working diligently to avert an otherwise inevitable debt crisis.”
Jason J. Fichtner, vice president and chief economist at the Bipartisan Policy Center, said that the country’s debt “is on an unsustainable trajectory, and action must be taken now.”
“Further delay will only make the problem worse and the necessary corrections more harmful to the country and to the most vulnerable in our society.”
Mark Zandi, chief economist at Moody’s Analytics, called for boosting tax revenue and implementing “spending restraint,” warning that if the debt situation is not resolved, America will “go into a recession, and our fiscal challenges will be made even worse.”
Rising national debt is bad news for Americans. As debt keeps climbing, bond buyers could seek higher interest rates due to the greater risk they take when purchasing the debt.
A rise in interest rates would make public investments aimed at fueling economic growth—like investments in education, health, and infrastructure—costly. This would mean there would be less investments in these areas.
Higher interest rates would make loans expensive for businesses, with the result that business investments will decline, thus harming the economy further. The combination of falling public investment and business investment means lower growth, which translates into less financial security for people.
Being saddled with large amounts of debt would also make the country less flexible when it comes to responding to a major financial crisis.
“As a father, I can’t begin to fathom the burden we are leaving behind for our children’s generation and beyond. For the good of our kids, we MUST get our fiscal house in order,” Rep. John James (R-Mich.) said about the growing national debt in a Sept. 19 X post.
The Kobeissi Letter, an industry-leading commentary on the global capital markets, pointed out in a Sept. 19 post on X that at the current pace of debt buildup, “we would see $50 trillion in U.S. debt within just a couple of years.”
“All as the Federal Reserve is calling for a soft landing and no recession. What happens to U.S. debt if a recession hits?” it said. “What’s making things worse is that U.S. tax receipts are down nearly 10 percent. $1.9 trillion in U.S. bonds will be issued to pay for deficit spending in third quarter and the fourth quarter.”
