For the first time, the US National debt has crossed $31 trillion. Here’s more about the newest report by the treasury department.
US National debt at its highest.
According to a treasury report released this week, America’s gross national debt has reached new heights, surpassing $31 trillion.
In simple words, it equals over $93,000 of debt per person in the nation. The debt is growing as the interest rates are dramatically rising in the past few months.
The last couple of years have been expensive for the nation and the US has been experiencing a deficit. A deficit occurs when the government spends more money than it collects in taxes. Since the beginning of the pandemic, several large bills with hefty price tags have been approved, including the American Rescue Plan Act, which cost $1.9 trillion, and $750 billion for student debt relief, all of which add to the deficit, which then adds to the debt.
“Excessive borrowing will lead to continued inflationary pressures, drive the national debt to a new record as soon as 2030, and triple federal interest payments over the next decade — or even sooner if interest rates go up faster or by more than expected,” stated the Committee for a Responsible Federal Budget (CRFB). The CRFB is estimating that $4.8 trillion will be added to the deficit by 2031.
What does this mean?
Every day, more than $965 million is spent on interest on the national debt. According to the Peterson Foundation, this will triple in the next decade, making it the fastest-growing item in the federal budget.
The Inflation Reduction Act passed in August is expected to reduce the deficit by $240 billion. Additionally, other policies and programs introduced by the Biden government are expected to add trillions more in the next ten years.
The United States Department of the Treasury manages the national debt, which is divided into what one government agency owes another and debts held by the public. Intergovernmental debt adds up to $6.5 trillion. However, the public debt is at about $24 trillion, making it a major concern.
The majority of this debt is held in Treasury securities, bills, and bonds, and is owned by foreign governments, banks, private investors, state and local governments, and the Federal Reserve.
Foreign governments and private investors are among the largest holders of public debt, accounting for approximately $7.7 trillion. Domestically, the Federal Reserve holds approximately 40% of the public debt.