WASHINGTON October. 5. (Xinhua) – The U.S. national debt has reached 31 trillion U.S. dollars for the first time in a period of the rise in interest rates, which has raised questions about the sustainability of fiscal policy.
The total outstanding public debt was 31.1 trillion dollars as of Monday, comprising 24.3 trillion dollars of public debt and 6.8 trillion of intergovernmental holdings, according to in the U.S. Treasury Department’s weekly Treasury statement, which was issued on Tuesday.
“This is a record-breaking year that no one should be happy about,” said Maya MacGuineas who is the president of the budget watch organization known as the Committee for a Responsible Federal Budget noting that it wasn’t until five years ago when the United States marked 20 trillion dollars of gross debt.
About one year ago, total amount of public debt outstanding was more than $30 trillion, which was an important fiscal mark.
The federal government’s current debt limit is 31.4 trillion dollars. This is following that the U.S. Congress passed legislation in December of the year 2000 to increase the limit and avoid a potential debt default.
“In the last two years, we’ve seen inflation climb to 40-year-highs as interest rates have risen in part in order to tackle the rising cost of living, and a variety of budget-busting laws and executive actions” MacGuineas said.
“While most of the new borrowing was required in order to fight COVID, we’re over the biggest issues of the disease, and it’s time to be budgeting responsiblybut we’re continuing to borrow,” she said. “We are in a state of addiction to borrowing.”
MacGuineas said that by 2022, only there will be a total of U.S. Congress and President Joe Biden have approved a together 1.9 trillion dollars of new borrowing. Biden has signed off on 4.9 trillion dollars of new deficits since he took his post.
Photograph taken on August. 16th, 2022, shows an image of the White House in Washington, D.C. in the United States. (Xinhua/Liu Jie)
For several decades, U.S. lawmakers have decided to “pass easily-to-understand policies” instead of confronting the challenges of real governance as per Maya MacGuineas.
WASHINGTON on Oct. 5. (Xinhua) – The U.S. national debt has reached 31 trillion U.S. dollars for the first time, despite rising interest rates, causing questions about the fiscal sustainability.
The total amount of public debt totaled 31.1 trillion dollars Monday, comprising 24.3 trillion dollars of debt that is held by the public as well as 6.8 trillion in government holdings, as per in the U.S. Treasury Department’s weekly Treasury report issued on Tuesday.
“This is a record-breaking year that no one should be happy about,” said Maya MacGuineas the president of the budget-watch organization The Committee for a Responsible Federal Budget noting that it wasn’t until five years ago when the United States marked 20 trillion dollars of gross debt.
Around one year ago, public debt outstanding surpassed thirty trillion dollars which was an important fiscal mark.
The current debt limit is 31.4 trillion dollars. This is following Congress passed legislation in December of last year. U.S. Congress passed legislation in December last year that sought to raise the limit to avoid the possibility of a debt default.
“In the last two years, we’ve seen inflation climb to 40-year-highs as interest rates have risen in part in order to tackle this rising inflation, as well as a number of budget-busting legislations as well as executive actions” MacGuineas added.
“While most of the new borrowing was required to fight COVID, we’re beyond the worst issues of the disease, and it’s time to be budgeting responsiblyhowever, we’re always borrowing money,” she said. “We are dependent on borrowing.”
MacGuineas pointed out that in 2022, only MacGuineas noted that in 2022 alone, U.S. Congress and President Joe Biden have approved a total of 1.9 trillion dollars of new borrowing. Biden has signed off on 4.9 trillion dollars of new deficits since he took the oath.
Photograph taken on December. 28, 2018 , shows a flying pigeon on Capitol Hill in Washington D.C. in the United States. (Xinhua/Liu Jie)
In a piece published on Tuesday in The Peter G. Peterson Foundation stated that the value of 31 trillion was higher than the total value that the nations that include China, Japan, Germany and Britain all together. It is equivalent to 26,000 debt dollars for each home across the United States.
“The coronavirus epidemic rapidly increased our fiscal problems, however the country was already on a non-sustainable trajectory, due to structural issues which existed before the outbreak,” the foundation said. “America’s increasing and steeply rising debt is a concern because it could threaten our economic stability.”
MacGuineas has also said that for many decades, U.S. lawmakers have made the decision to “pass simple policies that are politically acceptable” instead of facing the challenges of real governance.
“Our nation faces major fiscal problems in the near future. Medicare is just six years away from being insolvent as well Social Security insolvency is only 12 years away. Yet , policymakers have presented no strategy to ensure either program is on solid fiscal foundations,” said MacGuineas.
In a study released in May in May, in May, the Congressional Budget Office (CBO) warned that rising and increasing debt could have serious negative consequences for the economy and government budgets.
With the rise in interest rates the federal budget for interest, including the payments made to holders from abroad who hold U.S. debt, would rise significantly according to the report.
The debt path will also raise borrowing costs for private companies that could lead to less investment in businesses and slow expansion of economic output over time according to the report.
The CBO added that the probability of a fiscal crisis in United States would increase. “Specifically the danger could increase from investors losing faith of the U.S. government’s ability to pay its debt and service it and causing interest rates jump up abruptly and inflation to climb and other disruptions