New York Times report warns of rising debt, says it’s a ‘political problem’ for Biden


The New York Times published an article on Tuesday warning that the increase in the national debt, which has just exceeded the historical figure of 31 trillion dollars, poses “a political problem” for President Biden and an economic problem for all. the United States.

The article, titled “US National Debt Surpasses $31 Trillion for First Time,” was briefly featured on the front page of The New York Times and was written by economic policy reporter Alan Rappeport and the White House correspondent Jim Tankersley.

In the article, Rappeport and Tankersley warned that rising interest rates would make it more expensive for the federal government to borrow money, a change from the relatively cheap money it has been able to get. in recent years due to low interest rates and inflation.

“The United States’ gross national debt topped $31 trillion for the first time on Tuesday, a grim financial milestone that came just as the nation’s long-term fiscal picture darkened amid the crisis. rising interest rates,” the Times reported.

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Americans in San Francisco and New York noted President Biden’s performance in managing the economy.
(Ron Sachs/CNP/Bloomberg)

“The breach of the threshold, which was revealed in a Treasury Department report, comes at an inopportune time as historically low interest rates are replaced by higher borrowing costs as the Federal Reserve tries to fight back. against rapid inflation,” the article continues.

Last month, the Federal Reserve raised interest rates by 75 basis points, and it is expected to do so twice more this year. Higher interest rates make borrowing more expensive, including for the government, which sells various borrowing products to the public to fund its spending.

“Higher rates could add an additional $1 trillion to what the federal government spends on interest payments this decade, according to estimates by the Peterson Foundation,” the reporters wrote, noting that “its borrowing costs are rising and decrease with interest rates.

They pointed to a Congressional Budget Office report released earlier this year that warned that rising debt could cause investors to lose confidence in the ability of the U.S. government to repay what it owed: “These concerns, said the budget office, could cause ‘interest rates to rise sharply and inflation to soar higher.'”

NATIONAL DEBT EXCEEDS $31 TRILLION

US Treasury Secretary Janet Yellen listens to US President Joe Biden address reporters before the start of a cabinet meeting in the Cabinet Room of the White House on March 03, 2022 in Washington, DC.  (Photo by Anna Moneymaker/Getty Images)

US Treasury Secretary Janet Yellen listens to US President Joe Biden address reporters before the start of a cabinet meeting in the Cabinet Room of the White House on March 03, 2022 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)

As for the political implications of the rising debt, Times reporters wrote, “The $31 trillion threshold also poses a political problem for President Biden, who has pledged to put the United States on a more sustainable fiscal path and reduce federal budget deficits by $1. trillion over a decade.”

They noted that the Committee for a Responsible Federal Budget estimates that Biden’s spending added $5 trillion to the deficit.

“This projection includes Mr. Biden’s $1.9 trillion economic stimulus bill, a variety of new spending initiatives approved by Congress, and a student debt cancellation plan that is expected to cost taxpayers nearly $400 billion over 30 years,” the Times reported.

US President Joe Biden (C) meets with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office of the White House May 31, 2022 in Washington, DC.

US President Joe Biden (C) meets with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office of the White House May 31, 2022 in Washington, DC.
(Photo by Kevin Dietsch/Getty Images)

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Inflation has been stubbornly persistent, with the most recent Consumer Price Index data showing an inflation rate of 8.3%. Federal Reserve Chairman Jerome Powell announced that the central bank would continue to raise rates to fight inflation.


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