July 30th 2024.
Washington: The United States federal government has recently announced that the country's total public debt has exceeded $35 trillion for the first time ever. This news has raised concerns about the growing debt problem and its potential impact on the US economy.
According to the Daily Treasury Statement released by the Treasury Department, the total public debt outstanding reached $35 trillion on Friday. This statement is updated daily with data from the previous business day, as reported by Xinhua news agency.
It was only seven months ago that the US national debt broke the $34 trillion mark in December of 2023. And just three months before that, the country hit another milestone by surpassing $33 trillion.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, expressed her concern about the continuous borrowing with little regard for the consequences. "The borrowing just keeps marching along, reckless and unyielding," she stated in a recent statement. "Despite the warnings and red flags, it seems that these alarm bells are falling on deaf ears."
MacGuineas also stressed the urgency of addressing the debt issue, especially during election years. "We cannot afford to ignore the looming dangers any longer. The debt is one of the biggest threats we are facing, and we must take it seriously and take action soon," she added.
According to the Peter G Peterson Foundation, a nonpartisan organization dedicated to addressing the US's long-term fiscal challenges, the national debt of $35.001 trillion translates to approximately $104,000 of debt per person in the country.
The foundation also highlighted the main factors contributing to the deficit, including an aging population, rising healthcare costs, and an insufficient tax system. "Our deficits are primarily driven by predictable structural factors," the foundation stated.
Desmond Lachman, a senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund, has also expressed his concerns about the country's unsustainable budget deficit. "There is no denying that the US is on an unsustainable path," he stated in an earlier interview with Xinhua.
Lachman also pointed out the potential consequences of this "dangerous trajectory," such as the impact on the value of the US dollar and long-term inflation.
Many analysts have also joined the conversation, voicing their concerns about the US debt problem. Economist E J Antoni, a research fellow at the Heritage Foundation, reported that based on the Fed's June numbers, interest on the national debt is equivalent to 76% of all personal income taxes collected by the government.
Even American billionaire Elon Musk recently commented on the issue, stating on a social media platform that "America is going bankrupt btw."
BlackRock CEO Larry Fink also weighed in, emphasizing the urgency of addressing the deficit issue. "This is my message not just to the US but to every country right now," he stated. "We have rising deficits, and no one is talking about it enough. The US has the largest deficits in the world, and they are growing at an alarming rate. We need to find ways to minimize the impact of the deficit on our economy, interest rates, and inflation."
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