US debt surpasses $33T, increases by $1T in 3 months.
The United States National Debt Surpasses $33 Trillion, Raising Concerns Over Reckless Spending
The total national debt of the United States has reached a historic milestone, surpassing $33 trillion. Critics are increasingly pointing fingers at the Biden administration for its ”reckless spending” policies.
According to data from the U.S. Treasury Department, the total U.S. debt stood at $33.04 trillion on Sept. 15. This represents a rapid increase, considering that just three months earlier, on June 15, the debt was at $32.04 trillion. In other words, the debt rose by $1 trillion in a span of just three months. Meanwhile, the debt held by the public has exceeded $26 trillion.
Maya MacGuineas, president of the government watchdog Committee for a Responsible Federal Budget (CRFB), expressed concern over these staggering numbers, stating, “We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous.”
MacGuineas emphasized the need for serious action, saying, “Getting the debt under control will require taking a serious look at health care, Social Security, and the tax code.”
The CRFB recently highlighted that the federal budget deficit reached $2 trillion over the past year, double the previous fiscal year’s deficit of $1 trillion, as predicted by the Congressional Budget Office (CBO).
With federal funding set to run out on Sept. 30, there is a risk of a government shutdown. To avoid this scenario, Republicans have agreed on an interim spending bill, which includes an 8 percent cut in government spending on domestic agencies and the resumption of border wall construction. However, it is unlikely to pass the Senate, which is controlled by Democrats.
Lawmakers from both parties have voiced their concerns about the growing national debt. Senator Roger Marshall (R-Ks.) stated, “Our national debt just hit OVER $33 TRILLION. Joe Biden’s legacy is one of historic failures. We must reverse course and think about the impacts this president’s reckless spending will have on future generations.”
“For the first time in history, U.S. national debt has eclipsed $33 TRILLION dollars. Congress has failed. Both parties. It’s time to cut up the credit cards and make some tough decisions,” said Representative Eli Crane (R-Ariz.).
Threat of High Debt
Economic experts have raised alarm bells about the United States’s growing debt levels, warning that uncontrolled debt growth could eventually doom the country.
Brian Riedl, a senior fellow at the Manhattan Institute for Policy Research, referred to the soaring debt and interest rates as a ”ticking time bomb” during his testimony before the Senate Budget Committee. He urged Congress to work diligently to avert an otherwise inevitable debt crisis.
Jason J. Fichtner, vice president and chief economist at the Bipartisan Policy Center, emphasized the need for immediate action, stating that the country’s debt is on an unsustainable trajectory.
Mark Zandi, chief economist at Moody’s Analytics, called for boosting tax revenue and implementing spending restraint, warning that failure to address the debt situation could lead to a recession and worsen fiscal challenges.
The rising national debt has negative implications for Americans. As the debt continues to climb, bond buyers may demand higher interest rates due to the increased risk associated with purchasing the debt.
This rise in interest rates would make public investments aimed at fueling economic growth, such as investments in education, health, and infrastructure, more costly. Consequently, there would be fewer investments in these crucial areas.
Higher interest rates would also make loans more expensive for businesses, leading to a decline in business investments and further harm to the economy. The combination of reduced public and business investments results in lower growth, which ultimately undermines financial security for individuals.
Furthermore, a large amount of debt limits the country’s flexibility in responding to major financial crises.
“As a father, I can’t begin to fathom the burden we are leaving behind for our children’s generation and beyond. For the good of our kids, we MUST get our fiscal house in order,” expressed Representative John James (R-Mich.) regarding the growing national debt.
The Kobeissi Letter, a leading commentary on the global capital markets, warned that at the current pace of debt accumulation, the U.S. debt could reach $50 trillion within a couple of years. The post also highlighted the decrease in U.S. tax receipts and the issuance of $1.9 trillion in bonds to cover deficit spending in the third and fourth quarters.
What are the consequences of a high national debt and how does it threaten the economic stability and future of the United States?
“Continued reckless spending and the ballooning national debt pose a serious threat to the economic stability and future of the United States,” Riedl warned.
The consequences of a high national debt are manifold. It can lead to a decrease in investor confidence, higher interest rates, inflation, and a burden on future generations who will have to shoulder the responsibility of paying off the debt. Additionally, a high debt level limits the government’s ability to respond to emergencies or invest in essential areas such as infrastructure, education, and healthcare.
The Biden administration has defended its spending policies, arguing that the investments are necessary for economic recovery and long-term growth. They point to initiatives such as the American Jobs Plan and the American Families Plan, which seek to address infrastructure needs, create jobs, and invest in education and social programs.
However, critics argue that the scale of spending is unsustainable and will only exacerbate the national debt crisis. They point to the lack of adequate measures to offset the spending, such as reducing wasteful spending, reforming entitlement programs, and implementing tax reforms.
Addressing the national debt crisis will require a comprehensive and bipartisan approach. Lawmakers from both parties must come together to outline a responsible fiscal plan that addresses the root causes of the debt while ensuring the long-term financial stability of the country.
Measures to tackle the national debt should include a combination of spending cuts, entitlement reform, tax reforms, and economic growth strategies. It is crucial to prioritize fiscal responsibility and make tough choices to bring the debt under control.
Furthermore, transparency and accountability in government spending are essential. Regular audits and reviews of government programs and agencies can identify inefficiencies and areas where spending can be reduced or reallocated.
Public education on the implications of the national debt is also crucial. By raising awareness about the consequences of unchecked spending and the long-term effects of the national debt, citizens can put pressure on lawmakers to act responsibly and hold them accountable for their fiscal decisions.
The national debt is not just an issue for politicians and economists. It is a matter that affects every citizen of the United States. The burden of the debt falls on current and future generations, and it is imperative that action is taken to prevent further damage to the nation’s economy and financial stability.
As the United States national debt surpasses $33 trillion, it serves as a wake-up call for policymakers and citizens alike to address the culture of reckless spending. The time for action is now, before it is too late to reverse the detrimental effects of unsustainable debt levels. Only through responsible fiscal policies and bipartisan cooperation can the United States secure a stable financial future for generations to come.
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