US national debt hits record $34 trillion

On December 29, data released by the Treasury Department revealed that “total public debt outstanding” in the United States reached $34.001 trillion, also known as the national debt. This amount represents cumulative borrowing by the federal government throughout nation’s history. According to Daily Treasury Statement for Friday, there was an increase from $33.911 trillion on Thursday.

portion of debt applicable to the federal debt ceiling rose to $33.89 trillion on Friday, up from $33.794 trillion on Thursday. This category, known as “debt subject to limit,” excludes unamortised discount on Treasury bills and zero coupon bonds, debt from Federal Financing Bank, and certain agencies’ guaranteed debt.

Peter G. Peterson Foundation, an American bipartisan group advocating for fiscal responsibility, reported that U.S. government spends $2 billion daily on interest payments alone.

In response to these financial dynamics, Kikukawa expressed concern, stating, “Congressional Republicans aim to reinforce MAGAnomics with over $3 trillion in giveaways favouring wealthy, potentially burdening hardworking Americans through cuts to Social Security, Medicare, and Medicaid.”

Furthermore, Kikukawa highlighted President Biden’s strategy to address U.S. deficits, outlining a plan to reduce them by $2.5 trillion over next decade. This involves increasing taxes on large corporations and affluent Americans while cutting spending on pharmaceuticals and eliminating tax breaks for oil companies.

The US national debt has reached a new milestone, surpassing $34 trillion for the first time in history. This alarming figure reflects the unprecedented spending by the federal government in response to the COVID-19 pandemic, as well as the ongoing fiscal challenges posed by an aging population, rising health care costs, and a complex tax system.

The rising national debt has significant implications for the economy and the future generations of Americans. A high level of debt can limit the government’s ability to respond to new crises or invest in public goods, such as infrastructure, education, and research. It can also increase the risk of a fiscal crisis, where investors lose confidence in the government’s ability to repay its obligations and demand higher interest rates. Moreover, it can impose a heavy burden on taxpayers, who will have to pay more in interest and taxes to service the debt.

The CBO warns that under current law, the national debt will continue to grow faster than GDP in the coming years, reaching 102% of GDP by 2030 and 202% of GDP by 2050. To stabilize or reduce the debt-to-GDP ratio, the government will have to either increase revenue or decrease spending, or both. However, this will require difficult choices and trade-offs among competing priorities and values.

The national debt is not an abstract number that can be ignored or dismissed. It is a reflection of the fiscal choices that we make as a nation and a legacy that we leave for our children and grandchildren. As we recover from the pandemic and face new challenges and opportunities in the 21st century, we need to have an honest and informed debate about how to manage our finances responsibly and sustainably.