US National Debt Reaches Unprecedented Milestone, Surpassing Historic High

US National Debt Reaches Unprecedented Milestone, Surpassing Historic High

Ira Singh
18 June’23

In a significant development that has sent shockwaves through the global financial markets, the United States national debt has soared to an unprecedented level, eclipsing its previous historic high.

The latest data released by the US Treasury Department on Friday, reveals that US national debt passed a record $32 trillion for the first time ever this week,marking an alarming milestone in the nation’s financial history. This astronomical figure is a reflection of the country’s growing deficit, which has been steadily accumulating over the past decade.

The milestone was reached less than two weeks after President Joe Biden signed a bill suspending Washington’s $31.4 trillion limit, averting what would have been a first-ever US debt default. The measure allowed the country’s government to borrow unlimited funds until January 1, 2025, when the debt ceiling suspension ends, according to recent reports.This means the government can continue to pay for services at home, such as social security and Medicare, by borrowing money abroad and effectively amassing even more debt.

On the first business day after the debt ceiling was scrapped, federal borrowing surged roughly $400 billion.

According to the New York Times, the $32 trillion mark was reached nine years sooner than pre-Covid-19 pandemic forecasts had projected.

Experts attribute the surge in national debt to a variety of factors, including increased government spending, rising healthcare costs, and the economic impact of the COVID-19 pandemic.The unprecedented stimulus measures introduced to mitigate the effects of the global health crisis have significantly contributed to the ballooning debt. These measures involved substantial expenditures on unemployment benefits, small business loans, and direct payments to individuals.

Critics argue that the rapid growth of the national debt poses a grave threat to the long-term economic stability of the United States. Concerns have been raised over the ability of the government to service its debt, which requires interest payments that could become increasingly burdensome as the debt continues to rise. Additionally, the escalating debt levels may also lead to a downgrade in the country’s credit rating, making it more expensive for the government to borrow money in the future.

The implications of the burgeoning national debt extend beyond the United States. As the world’s largest economy, any disruptions to the financial health of the US have a ripple effect on the global stage.