The national debt of the United States has exceeded the mark of $34 trillion, showing an increase of almost $3 trillion over the past year, reports The Washington Post. The publication attributes this rapid growth to the increased cost of servicing the national debt, high spending and reduced tax revenues.
The United States’ national debt has exceeded $34 trillion for the first time in history, The Washington Post reported citing the country’s Treasury Department.
Approximately three months after the debt first reached $33 trillion, its volume passed the new mark. Last year, the cost of servicing the national debt rose because of the Federal Reserve’s campaign to raise interest rates, spending remained above pre-coronavirus levels, and tax revenues fell – all of which worsen the country’s financial outlook.
The debt has grown by nearly $3 trillion through 2023. Last January, the U.S. debt ceiling, set by law at $31.4 trillion, was exceeded. After that, the Treasury Department had to use emergency measures to continue financial operations.
Although some experts believe that the U.S. government has enough borrowing capacity without the risk of an economic crisis, others warn that the constant growth of the national debt poses a threat to the overall financial health of the country.
Opinions are also divided as to who is to blame for the situation. President Joe Biden blamed the Republican Party’s tax cut initiative for the trillions of dollars in increased deficits. In turn, Republicans in Congress put the blame on spending measures passed under Biden and other Democratic presidents.
“Reaching the $34 trillion mark is yet another reminder of how unsustainable our fiscal situation is. We are adding $2 trillion to our debt every year while unemployment is near record lows. If we increase debt that much in good times, the situation could get really dire in bad times,” warned CRFB’s Mark Goldwein.
As The Washington Post reminds us, after returning from the Christmas recess next week, the U.S. Congress will have to avoid a government shutdown. There are two deadlines for funding extensions: 19 January and 2 February.