On February 1, the U.S. Treasury Department released data showing that the total U.S. national debt exceeded the US$30 trillion mark for the first time, a record high that greatly exceeded the total U.S. economy last year (US$23.04 trillion).
According to the New York Times, as of Jan. 31, the total outstanding public debt of the U.S. was $30.01 trillion, an increase of nearly $7 trillion from the end of January 2020. The $30 billion national debt includes $23.487 trillion held by the public, $6.525 trillion held by government accounts such as the Federal Trust Fund, and nearly $8 trillion from foreign investors, of which Japan and China are the top two overseas creditors of the United States, and these debts will eventually need to be repaid with interest.
The report said that the 30 trillion dollar mark came earlier than expected. In December 2007, before the 2008 financial crisis, the total amount of U.S. debt was $9.2 trillion. Starting from the Great Recession in 2008, the U.S. debt soared in the past few years, especially during the new crown epidemic, the federal government adopted a huge fiscal and monetary incentives – a large number of additional U.S. dollars and Treasury bonds to inject sufficient liquidity into the market to cushion the impact of the crisis on the economy, making the total amount of U.S. debt grew rapidly.
In response, Michael Peterson, CEO of the Peter G. Peterson Foundation, issued a dire warning that “breaking the $30 trillion mark is clearly an important milestone in our dangerous fiscal trajectory.
Peterson also stressed that the federal government’s accumulating debt is the result of a long history of fiscal irresponsibility on the part of both the Democratic and Republican parties in Congress. Over the past few decades, Washington politicians have repeatedly opted for tax cuts or government spending programs rather than thinking about America’s future. He urged U.S. policymakers to get serious about addressing the government’s debt and reshaping fiscal sustainability.
On the other hand, many of the federal epidemic assistance programs authorized by Congress have now expired, leaving Americans with less financial assistance than they had in the early days of the epidemic, and the Federal Reserve has signaled that it is raising interest rates to combat high inflation in the United States.