According to a report released by the US Treasury Department on the 2nd, the country's total national debt has exceeded 34 trillion dollars, hitting a record high. The US think tank scholars said that this milestone number sounded the alarm for US lawmakers and voters. Adding trillions of dollars to the debt year after year should be a "flashing red warning sign" for the United States.
$34 trillion 'red alert'
On January 2, local time, the US Treasury Department released a report showing that the total US national debt exceeded 34 trillion US dollars for the first time. The staggering figure marks another "dangerous" milestone for US debt.
In fact, the scale of US debt has accelerated in recent years. In February 2022, the total US debt exceeded $30 trillion. In June 2023, the US debt exceeded $32 trillion, reaching this figure nine years earlier than the pre-COVID-19 forecast. In September 2023, the US debt reached the $33 trillion mark again.
According to Capital Group, America's debt is increasing by almost $20bn a day. If these huge debts are now shared out among the American people, it is equivalent to more than $100,000 per person in debt.
Michael Peterson, CEO of the Peterson Foundation, said that the US national debt will continue to soar in the future, "adding trillions of dollars to the debt year after year should be a flashing red warning sign for any decision maker who cares about the future of the United States."
Maya McGinnis, president of the Committee for a Responsible Federal Budget, said the new milestone should serve as a wake-up call for lawmakers and voters. She said that level of debt was dangerous for the US economy and national security, but the US "cannot stop borrowing".
Mark Godwin, senior policy director at the Committee for a Responsible Federal Budget, said, "Reaching $34 trillion is another reminder of how unsustainable our fiscal situation is."
Michael Peterson makes the same point, arguing that the U.S. national debt remains on a destructive and unsustainable path into the New Year.
America's 'World War'
According to the Council on Foreign Relations, the US national debt is now almost the same size as the entire US economy, and it is expected to double again within the next three decades.
The Bipartisan Policy Center said that if the debt continues to rise, the United States could face serious economic consequences, such as higher interest rates, a recession or higher inflation. Shay Akabas, director of economic policy at the center, noted that "investors and rating agencies are increasingly concerned that our current trajectory is unsustainable - and it's anyone's guess when that will get scarier."
Some economists also say it could expose the United States to a number of dangers, including a budget crisis, rising interest rates, economic instability and a weakened global position. Reducing the debt will require Congress to make "difficult" political decisions to curb spending, raise taxes, or do both.
Jim Lacamp, senior vice president of investment at Morgan Stanley, said that due to the "squandering" of taxpayer money by the U.S. government, inflationary pressure in the United States will persist, especially with the upcoming U.S. election in 2024, and U.S. government spending may continue to surge.
On June 19, 2023, local time, U.S. President Joe Biden arrived at Moffett Federal Airport in the San Francisco Bay Area, California. According to US media reports, the trip to California Biden will announce his plan to combat climate change, and attend a number of campaign fundraisers. Photo by Liu Guanguan/China News Service
As the national debt soared, the Treasury had to borrow more money to pay for government spending, repeatedly pushing the United States to the brink of default. Experts believe that if the U.S. national debt continues to grow and cause a default, it could even wreak havoc on global financial markets.
Jody Arrington, chairman of the House Budget Committee, said: "I believe this is the greatest challenge facing America in the 21st century - that our out-of-control deficits and inappropriate national debt threaten not only our economy, but our national security, our way of life, our leadership in the world, all that is good about America and the future of our children," he said.
Arrington warned that this would be the "world war" of the American generation, and that the cost of losing it would be catastrophic and irreparable.
Kenneth Rogoff, a professor at Harvard University and former economist at the International Monetary Fund, has warned that the United States has long treated debt as a "free lunch," piling on new debts to pay off old ones. Now, "the United States has to change that view."
