The U.S. National Debt topped $34 trillion in the United States for the first time, marking a significant milestone at a moment when government spending has already been under scrutiny.
According to the latest data released by the Treasury Department, the national debt (which measures how much the U.S. is owed by its creditors) reached $34 trillion on Friday afternoon. In comparison, only four decades ago the national debt was around $907 billion.
“We have a new beginning, but our debt is still on the same unsustainable and damaging path,” Michael Peterson, CEO of the Peter G. Peterson Foundation. The foundation advocates fiscal sustainability.
Congress is rushing to pass critical funding bills to avoid a shutdown of the government.
According to the latest findings of the Congressional Budget Office, the national debt will nearly double over the next 30 years. The national debt will reach 97% of the gross domestic product by the end of 2022.
According to current law, this figure is expected to skyrocket up to 181% by the end of 2053. This will be a debt burden far exceeding any previous levels.
“America cannot stop borrowing, even though our debt level is dangerous for our economy as well as for our national security,” said Maya MacGuineas. She’s the president of the Committee for a Responsible Federal Budget.
The cost of servicing national debt has increased due to the increase in interest rates.
As interest rates increase, so will the borrowing costs for the federal government. According to the CRFB, the interest on the national debt is projected to grow at the fastest rate in the federal budget for the next 30 years.
The payments are projected to triple in size from $475 billion to $1.4 trillion by 2032. Interest payments are expected to reach $5.4 trillion by 2053.
This is more than what the United States spends on Social Security, Medicare, and other mandatory and discretionary programs.