The U.S. national debt has now surpassed a staggering $33 trillion, marking a significant and concerning milestone. Just four decades ago, this debt was a mere $907 billion, highlighting the alarming rate of its increase. While this growing debt may have become somewhat normalized, it remains a critical issue with potentially dire consequences for the nation’s financial stability.
Fitch Ratings, an influential credit rating agency, recently downgraded the U.S. long-term credit score, moving it from the pristine AAA rating to AA+. This decision was primarily motivated by concerns over the country’s worsening financial situation and doubts about the government’s ability to address the mounting debt amid political divisions.
Economists and financial experts have consistently raised alarm bells regarding the rapid pace of government spending by Congress and the White House. The Congressional Budget Office predicts that the national debt will nearly double in size over the next 30 years. Currently, the debt stands at about 97% of the gross domestic product (GDP), but under existing legislation, it is expected to soar to a staggering 181% by the end of 2053.
Such a high level of debt could pose a substantial risk to America’s economic standing globally. It threatens the stability of the economy and burdens future generations with its consequences. Despite the concerning trajectory of the national debt, President Biden and Democratic lawmakers have approved extensive spending measures, including the American Rescue Plan and the infrastructure bill, totaling approximately $4.8 trillion in borrowing as of September 2022.
While this amount is less than the $7.5 trillion added to the deficit during former President Trump’s tenure, it far exceeds Trump’s borrowing at the same point in his presidency. President Biden has defended his administration’s spending, highlighting a $1.7 trillion reduction in the deficit during his first two years. However, this reduction is primarily due to the expiration of emergency measures implemented during the COVID-19 pandemic.
Additionally, the recent increase in interest rates has made servicing the national debt more expensive, with interest payments projected to triple from nearly $475 billion in fiscal year 2022 to a staggering $1.4 trillion by 2032. These payments are expected to surpass spending on crucial programs like Social Security, Medicare, and Medicaid.
In light of these challenges, it is evident that the nation’s fiscal path is unsustainable, and immediate action is needed to address the growing national debt and its potentially devastating consequences.