The U.S. government’s gross national debt has exceeded $37 trillion, a new record.
This milestone, highlighted in a recent Treasury Department report, signals the nation’s accelerating debt and growing cost pressures on taxpayers.
The national debt eclipsed $37 trillion years sooner than pre-pandemic projections.
The Congressional Budget Office’s January 2020 projections had gross federal debt eclipsing $37 trillion after fiscal year 2030.
But the debt grew faster than expected because of a multi-year COVID-19 pandemic starting in 2020 that shut down much of the U.S. economy, where the federal government borrowed heavily under then-President Donald Trump and former President Joe Biden to stabilize the national economy and support a recovery.
And now, more government spending has been approved after Donald Trump signed into law Republicans’ tax cut and spending legislation earlier this year.
The law set to add $4.1 trillion to the national debt over the next decade, according to Congressional Budget Office estimate.
Chair/CEO of the Peter G. Peterson Foundation, Michael Peterson, said in a statement that government borrowing puts upward pressure on interest rates, “adding costs for everyone and reducing private sector investment.
“Within the federal budget, the debt crowds out important priorities and creates a damaging cycle of more borrowing, more interest costs, and even more borrowing.”
Wendy Edelberg, a senior fellow in Economic Studies at the Brookings Institution, said Congress has a major role in setting in motion spending and revenue policy and the result of the Republicans’ tax law “means that we are going to borrow a lot over the course of 2026, we’re going to borrow a lot over the course of 2027, and it’s just going to keep going.”
The Government Accountability Office outlines some of the impacts of rising government debt on Americans — including higher borrowing costs for things like mortgages and cars, lower wages from businesses having less money available to invest, and more expensive goods and services.
Peterson points out how the trillion-dollar milestones are “piling up at a rapid rate.”
The U.S. hit $34 trillion in debt in January 2024, $35 trillion in July 2024 and $36 trillion in November 2024.
“We are now adding a trillion more to the national debt every 5 months,” Peterson said. “That’s more than twice as fast as the average rate over the last 25 years.”
The Joint Economic Committee estimates at the current average daily rate of growth an increase of another trillion dollars to the debt would be reached in approximately 173 days.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement that “hopefully this milestone is enough to wake up policymakers to the reality that we need to do something, and we need to do it quickly.”
Author
Leave a comment