The US national debt under the Biden administration reached $32 trillion after rising by $572 billion after the debt ceiling was suspended two weeks ago. The total national debt has now surpassed $32.0 trillion.
The $32 trillion mark comes less than two weeks after President Joe Biden signed the Fiscal Responsibility Act of 2023, a compromise with Republicans led by House Speaker Kevin McCarthy to cut spending by $1.5 trillion over a decade and suspend the nation’s debt limit until January 2025.
Total public debt outstanding surpassed $30 trillion for the first time in early 2022, then surpassed $31 trillion less than nine months later. The debt stood at $32,039,244 as of the end of the day on Thursday.
The $32 trillion mark reached nine years earlier than expected, demonstrating the Biden Administration’s reckless spending of trillions of dollars.
Republicans have expressed alarm about the national debt, but the Biden administration has shown little willingness to address its main drivers, such as Social Security and Medicare spending Wolfstreet reports.
During the May impasse, Moody’s Analytics chief economist Mark Zandi stated that lawmakers’ planned budget cutbacks did not address the expenses of social safety-net programmes. Although avoiding a default will avert an immediate crisis, he stated that the increasing debt is a long-term issue that must be addressed.
To please the Republican majority’s ultraconservative fringe, the House Appropriations Committee began reviewing its next spending legislation this week, signalling that it would finance federal agencies at levels lower than President Joe Biden and Speaker Kevin McCarthy, R-Calif., had agreed to.
Failure to adopt and reconcile measures in the House and Senate by Oct. 1 could result in a government shutdown. If the individual measures are not approved by the end of the year, an automatic 1% decrease will be implemented.
At the same time, House Republicans began discussing fresh tax cuts this week. The bill would increase the standard deduction for individual taxpayers and provide some company tax breaks in order to encourage investment while reducing energy tax credits. According to the Committee for a Responsible Federal Budget, which advocates for lower spending, the proposed law would cost $80 billion over a decade, or $1.1 trillion if the provisions were made permanent.
Some have suggested that Congress establish a bipartisan fiscal commission to address the long-term causes of the national debt.
“As we race past $32 trillion in debt with no end in sight, it’s well past time to address the fundamental drivers of our debt, which are mandatory spending growth and a lack of sufficient revenues to fund it,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, which advocates for deficit reduction.
The Peterson Foundation voiced worry about forecasts that the United States will add $127 trillion in debt over the next 30 years, with interest costs accounting for roughly 40% of total federal revenues by 2053.
At a House Financial Services Committee hearing this week, Treasury Secretary Janet Yellen defended the Biden administration’s handling of the nation’s finances, emphasising that the White House had submitted a budget this year that reduced the deficit by $3 trillion. She also told the panel that interest rates were anticipated to fall in the medium future, easing the debt burden.
Yellen suggested that Republican tax ideas will exacerbate the fiscal crisis.
“They would benefit wealthy individuals and corporations while doing nothing for working families,” she asserted. “It’s not paid for, and it would exacerbate the debt.”
The US National Debt Ceiling
The U.S. debt ceiling refers to the statutory limit on the amount of debt that the U.S. government can issue to finance its operations and obligations. It is a limit set by Congress to control the total amount of debt outstanding. When the debt ceiling is reached, the government is not allowed to borrow any more money unless the debt ceiling is raised or suspended.
The debt ceiling has been a topic of political debate and contention in the United States. Historically, Congress has raised the debt ceiling when necessary to prevent a default on U.S. government debt obligations. However, there have been instances where negotiations over raising the debt ceiling have become contentious and led to significant political and economic uncertainty.
The national debt refers to the total amount of money owed by a government through its borrowing activities to fund its expenditures over time. It is the accumulation of the government’s budget deficits over the years. Governments often borrow money by issuing bonds, treasury bills, and other forms of debt instruments.
The national debt is an essential component of a country’s overall fiscal policy and is influenced by various factors such as government spending, tax revenue, economic conditions, and interest rates. When a government spends more than it collects in taxes, it incurs a budget deficit, and it needs to borrow money to cover the shortfall. This borrowing increases the national debt.
It’s important to note that the national debt is different from the budget deficit. The deficit refers to the difference between the government’s spending and its revenue in a particular fiscal year, while the debt is the accumulation of deficits over time.
The level of national debt can have both positive and negative implications. On one hand, government borrowing can provide necessary funds for investments in infrastructure, education, healthcare, and other essential services. It can also stimulate economic growth during downturns. On the other hand, a high national debt can pose challenges for a country. It may lead to higher interest payments, diverting funds from other important areas. Additionally, if the debt is unsustainable, it can negatively impact a country’s credit rating, making it more expensive to borrow in the future.
It’s worth noting that the specific national debt figures can vary greatly from country to country. If you have a specific country in mind, I can provide more detailed information about its national debt situation.