US National Debt: Nation’s Gross National Debt Surpassed $31 Trillion

The country’s gross national debt topped $31 trillion, according to a US Treasury report released Tuesday that records America’s day-to-day finances.

Approaching the statutory ceiling of about $31.4 trillion – an artificial ceiling imposed by Congress on the borrowing capacity of the US government – the debt figures hit an already precarious economy struggling with high inflation, rising interest rates and a strong US dollar.

And while President Joe Biden has touted his administration’s deficit-cutting efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to rein in the 40-year-high price hikes caused by various economic factors, economists say the latest debt figures are a cause for concern.

Owen Zidar, a Princeton economist, said rising interest rates would exacerbate the country’s growing debt problems and make the debt itself more expensive. The Federal Reserve has raised rates several times this year in an effort to fight inflation.

Zidar said the debt “should encourage us to consider some tax policies that have nearly made it through the legislative process but haven’t received enough support,” such as imposing higher taxes on the wealthy and removing the tax system. carried interest loophole, which allows fund managers to treat their income as capital gains.

“I think the point here is if you weren’t worried about debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.

The Congressional Budget Office released a report on US debt earlier this year, warning in its 30-year outlook that if left unaddressed, debt will soon soar to new heights. which could ultimately jeopardize the US economy.

In its August midterm review, the administration projected this year’s budget deficit to be nearly $400 billion lower than it estimated in March, in part due to higher than expected, of reduced spending and of an economy that has recovered all the jobs. lost during the multi-year pandemic.

In total, this year’s deficit will decline by $1.7 trillion, the largest decline in the federal deficit in U.S. history, the Office of Management and Budget said in August.

Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, said in an emailed statement on Tuesday, “This is a new record that no one should be proud of.”

“Over the past 18 months, we have seen inflation rise to its highest level in 40 years, interest rates have risen in part to combat that inflation, and several pieces of legislation and measures anti-budget executives,” MacGuineas said. “We are addicted to debt.”

A Treasury Department representative was not immediately available for comment.

Sung Won Sohn, professor of economics at Loyola Marymount University, said “it took this nation 200 years to rack up its first trillion dollars in national debt, and since the pandemic we’ve been adding more at the rate of 1 trillion almost every quarter”.

Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and the money supply, you will pay the price later.”

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