The National Debt

[Gregory Matthews]

For an interesting comment on the US national debt see:

https://www.msn.com/en-us/news/politics/kevin-mccarthy-s-debt-ceiling-gamble-the-stupid-cruelty-of-republicans-default-tantrum/ar-AA1apZQw?ocid=msedgdhp&pc=U531&cvid=5602220aabab488e9c1aec4d7bbcf969&ei=30

 

[phkrause]

Exactly!!

[phkrause]

US national debt hits record $34 trillion as Congress gears up for funding fight

WASHINGTON (AP) — The federal government’s gross national debt has surpassed $34 trillion, a record high that foreshadows the coming political and economic challenges to improve America’s balance sheet in the coming years.

https://apnews.com/article/national-debt-deficits-biden-economy-inflation-record-b4258704f830c7f6e9c5e693748216cb?

[phkrause]

America’s debt tops $34 trillion, but a commission to address it appears dead in Congress

WASHINGTON (AP) — For Mike Johnson it was effectively a Day 1 priority.

https://apnews.com/article/federal-debt-bipartisan-commission-taxes-spending-cuts-5075a3c7890d2f3b7f21b4eeda9372eb?

ps:They yap and yap, but nothing gets done!!

[phkrause]

? New debt warning

Chart: Congressional Budget Office In another election-year warning, the International Monetary Fund said it's concerned about America's ballooning national debt. "For the U.S., we see ample ground for them to reduce the size of their fiscal deficits," the IMF's second-in-command, Gita Gopinath, told the Financial Times ($). Why it matters: There's no appetite from either President Biden or Donald Trump to bring down the deficit — historically a pillar of mainstream Republican (and moderate Democratic) politics. Trump wants to make his 2017 tax cuts permanent if he's elected. Biden has failed to bring deficits under control despite claiming historic reductions.

[phkrause]

? $50 trillion debt

Data: Treasury Department, CBO. Chart: Axios Visuals The U.S. national debt is projected to balloon to $50 trillion in a decade, according to Congressional Budget Office estimates released yesterday. Why it matters: The U.S. budget outlook is bleak — and neither party has any political appetite to reduce the deficit. Debt held by the public will increase from 99% of GDP this year to 122% in 2034 — the highest on record, Axios Macro co-author Courtenay Brown writes. Next year, the federal government's interest costs are expected to be a greater share of GDP than at any point since the CBO began reporting data in 1940. Go deeper: Immigration surge projected to boost growth, CBO says.

[phkrause]

? America's debt-bomb election

Data: Committee for a Responsible Federal Budget. Chart: Axios Visuals Both presidential candidates' agendas would add trillions to already-enormous U.S. fiscal deficits over the next decade, Axios' Neil Irwin writes from a new analysis out this morning. Why it matters: The winner in November will inherit a very different economic backdrop than either former President Trump or President Biden did upon taking office in 2016 and 2020. Debt is already much higher than it was then. Interest rates are substantially higher, making the cost of servicing that debt more burdensome to taxpayers. "If the next president doesn't lead in putting a fiscal reform plan in place, we will hit the record debt level this country has ever seen, and be much weaker for it," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, tells Axios. Former President Trump speaks to a rally yesterday in Juneau, Wis. Photo: Julia Demaree Nikhinson/AP ? By the numbers: Former President Trump's plans would add $7.5 trillion to cumulative deficits from 2026 to 2035, according to the Committee for a Responsible Federal Budget. Vice President Harris' agenda would add $3.5 trillion to the tally.

[phkrause]

National debt

Yet again, the federal government spent far more than it collected in revenue, racking up a budget deficit of $1.8 trillion for fiscal year 2024, according to the Congressional Budget Office. While the deficit is typically a concern during presidential election years, former President Donald Trump and Vice President Kamala Harris continue to unveil pricey policies. Trump's platform could hike the national debt by $7.5 trillion over a decade, while Harris' package could increase it by $3.5 trillion, according to a recent analysis. On Tuesday, Harris proposed broadening Medicare benefits to pay for home health care for the first time — an appeal to Americans caring for children and aging parents. Covering home health care, however, could be very expensive. To cover the cost, Harris said she would expand Medicare drug price negotiations.

[phkrause]

The rising price of paying the national debt is a risk for Trump’s promises on growth and inflation

WASHINGTON (AP) — Donald Trump has big plans for the economy — and a big debt problem that will be a hurdle to delivering on them.

https://apnews.com/article/trump-national-debt-inflation-economic-growth-spending-895ec1551122a0e1babf24b657f650bb?

[phkrause]

US national debt reaches a record $37 trillion, the Treasury Department reports The U.S. government’s gross national debt has surpassed $37 trillion, a record number that highlights the accelerating debt on America’s balance sheet and increased cost pressures on taxpayers. The update is found in the latest Treasury Department report issued Tuesday. Read more.

Why this matters:  The Congressional Budget Office’s projections had the debt eclipsing $37 trillion after fiscal year 2030. But it grew faster than expected because of the COVID-19 pandemic, when the federal government borrowed heavily under then-President Donald Trump and former President Joe Biden to stabilize the national economy and support a recovery.   More government spending has been approved after Trump signed into law Republicans’ tax cut and spending legislation earlier this year. The law is set to add $4.1 trillion to the national debt over the next decade, according to Congressional Budget Office estimates.   The Government Accountability Office outlines some of the impacts of rising government debt on Americans — including higher borrowing costs for things like mortgages and cars, lower wages from businesses having less money available to invest, and more expensive goods and services.

[phkrause]

💰 The U.S. national debt passed a record $39 trillion yesterday. The debt hit $38 trillion five months ago — and $37 trillion two months before that. Go deeper.

[phkrause]

🤑 The national debt now exceeds 100% of GDP, The Wall Street Journal notes: "By itself, the milestone doesn't mean much. ... Still, the triple-digit mark is a potent symbol of the fiscal stresses on the U.S. that have been building for decades." Gift link.

[phkrause]

💸 America's bleak milestone

Data: Bureau of Economic Analysis and Treasury Department. Chart: Neil Irwin/Axios The United States crossed a symbolic threshold: The national debt is now larger than its GDP. Axios' Neil Irwin makes sense of the significance: There's nothing inherently unsustainable about a 100% debt-to-GDP level. What matters is why it got that high, the prospects for future borrowing, and the forecast for growth and borrowing costs. Across those dimensions, the U.S. fiscal outlook is exceptionally gloomy, in ways not reflected in much of the day-to-day political discourse. 🔬 Zoom in: Consider a family with $100,000 in debt and an annual income of $100,000. Is their debt excessive? It depends. If the family ran up that debt due to one-time expenses that won't recur and has a low interest rate, rising income and day-to-day spending in line with what they bring in, they're probably fine. If, on the other hand, they ran up that debt to support routine living expenses in excess of their earnings and have a high interest rate and stagnant income, it would raise serious alarms. Threat alert: The U.S. government is closer to the second scenario.

[phkrause]

$40 trillion and counting

The US is nearing a record $40 trillion in debt and will likely cross that threshold today.

This milestone reflects decades of the federal government spending more than it collects in revenue, creating annual deficits that add to the national debt. That imbalance is nothing new: The US has carried debt since its inception, according to the Treasury Department, with wars, economic downturns and, more recently, the Covid-19 pandemic adding significantly to the total.

President Donald Trump has promised to use tariffs, among other measures, to help pay down the figure. But his tariff agenda has been marked by shifting deadlines and tensions with America’s closest trading partners. (Just hours ago, Trump postponed a 50% tariff he had threatened on some Canadian goods that was set to take effect today.) At this rate, though, another major debt fight may not be far off. The US could hit its $41.1 trillion debt ceiling early next year, putting Congress back in the familiar position of debating whether to raise it once again.

+ Read more: Trump postpones 50% tariff he threatened for some Canadian goods

+ Plus: Inflation and national debt concerns are rattling bond markets. Here’s how that may affect you