According to data released by the Treasury Department, the U.S. national debt has reached an all-time high of $33 trillion. This alarming figure comes at a time when Congress is scrambling to prevent a government shutdown by the end of September, adding another layer of complexity to the nation’s already precarious fiscal situation.
The numbers behind the crisis
Four decades ago, the national debt was about $907 billion. Fast forward to today, and the debt has ballooned to 97% of the country’s Gross Domestic Product (GDP). Projections from the Congressional Budget Office indicate that if current laws remain unchanged, the national debt could constitute 181% of GDP by 2053. Maya MacGuineas, President of the Committee for a Responsible Federal Budget, warned, “We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous.”
The cost of servicing this colossal debt is also on the rise, thanks in part to increasing interest rates. Payments on the national debt are expected to triple from nearly $475 billion in 2022 to $1.4 trillion in 2032. By 2053, these payments could skyrocket to $5.4 trillion, surpassing what the U.S. currently spends on Social Security, Medicare, Medicaid, and other mandatory and discretionary programs.
Political gridlock and the road ahead
To avert a government shutdown, House Republicans introduced a short-term plan that would temporarily fund the government through October 31. However, the proposal, which calls for an 8% spending cut on federal agencies while excluding defense, veterans affairs, and disaster relief, has already encountered opposition within the GOP ranks. This sets the stage for another high-stakes showdown on Capitol Hill, as the clock ticks down to a potential fiscal catastrophe.
Michael Peterson, CEO of the Peter G. Peterson Foundation, lamented the lack of long-term solutions, stating, “As lawmakers drift from one short-term fiscal crisis to the next, our national debt just keeps piling up, trillion after trillion.”
The latest fiscal reports indicate that the debt ceiling, a functioning cap on how much the United States Treasury can borrow, was $31.41 trillion in January 2023. This means the debt has surged by nearly $2 trillion in less than a year, partly due to COVID relief and aid to Ukraine.
As the U.S. faces just seven legislative days to prevent a government shutdown and grapples with a debt crisis, the question remains: Will leaders in government take the necessary steps to put the nation back on a sustainable fiscal path? Only time will tell. The fight to relieve Americans’ debt and build a stable economy is a collective responsibility that the nation can not afford to ignore.
