America’s National Debt Hits Record $31 Trillion

WASHINGTON — The nation’s gross national debt has surpassed $31 trillion, according to a Treasury report released Tuesday. The debt exceeds the American economy’s gross domestic product of about $25 trillion.Edging closer to the statutory ceiling of roughly $31.4 trillion — a cap Congress placed on the federal government’s ability to borrow — the debt numbers hit an already tenuous economy facing high inflation, rising interest rates and a strong dollar.And while President Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame 40-year high price increases caused by a variety of economic factors, economists say the latest debt numbers are a cause for concern.A Princeton economist, Owen Zidar, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.Mr. Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.“I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Mr. Zidar said.The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the American economy.In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be just over $1 trillion. That is nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all the jobs lost during the multi-year pandemic.In full, this year’s deficit is expected to be about $1.7 trillion less than last year’s nearly $2.8 trillion shortfall. That is the single largest decline in the federal deficit in American history, the Office of Management and Budget has said.The president of the Committee for a Responsible Federal Budget, Maya MacGuineas, said in an emailed statement Tuesday, “This is a new record no one should be proud of.”“In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” Ms. MacGuineas said. “We are addicted to debt.”A representative from the Treasury Department was not immediately available for comment.An economics professor at Loyola Marymount University, Sung Won Sohn, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

America’s National Debt Hits Record $31 Trillion

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