The U.S. national debt exceeded $33 trillion for the first time ever on Monday, crossing a critical milestone at a time when government spending is already under scrutiny.
The national debt — which measures what the U.S. owes its creditors — surged to roughly $33.04 trillion as of Monday afternoon, according to the latest numbers published by the Treasury Department. By comparison, just four decades ago, the national debt hovered around $907 billion.
“The United States has hit a new milestone that no one will be proud of: our gross national debt just surpassed $33 trillion,” said Maya MacGuineas, the president of CRFB. “Debt held by the public, meanwhile, recently surpassed $26 trillion. We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous.”
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The unrelenting increase is what prompted Fitch Ratings to issue a surprise downgrade of the nation’s long-term credit score in early August. The agency cut the U.S. debt by one notch, snatching away its pristine AAA rating in exchange for an AA+ grade. In making the decision, Fitch cited alarm over the country’s deteriorating finances and expressed concerns over the government’s ability to address the ballooning debt burden amid sharp political divisions.
“This is a warning shot across the U.S. government’s bow that it needs to right its fiscal ship,” Sean Snaith, an economist at the University of Central Florida, told FOX Business. “You can’t just spend trillions of dollars more than you have in revenue every year and expect no ill consequences.”
The outlook for the federal debt level is bleak, with economists increasingly sounding the alarm over the torrid pace of spending by Congress and the White House.
The latest findings from the Congressional Budget Office indicate that the national debt will nearly double in size over the next three decades. At the end of 2022, the national debt grew to about 97% of gross domestic product. Under current law, that figure is expected to skyrocket to 181% at the end of 2053 — a debt burden that will far exceed any previous level.
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Should that debt materialize, it could risk America’s economic standing in the world.
“America’s fiscal outlook is more dangerous and daunting than ever, threatening our economy and the next generation,” said Michael Peterson, the CEO of the Peter G. Peterson Foundation that advocates for reducing the federal deficit. “This is not the future any of us want, and it’s no way to run a great nation like ours.”
The spike in the national debt comes after a burst of spending by President Biden and Democratic lawmakers. As of September 2022, Biden had already approved roughly $4.8 trillion in borrowing, including $1.85 trillion for a COVID relief measure dubbed the American Rescue Plan and $370 billion for the bipartisan infrastructure bill, according to the Committee for a Responsible Federal Budget (CRFB), a group that advocates for reducing the deficit.
While that is about half of the $7.5 trillion that former President Donald Trump added to the deficit while he was in office, it’s far more than the $2.5 trillion Trump had approved at that same point during his term.
Biden has repeatedly defended the spending by his administration and boasted about cutting the deficit by $1.7 trillion.
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“I might note parenthetically: In my first two years, I reduced the debt by $1.7 trillion. No President has ever done that,” Biden said recently.
However, that figure refers to a reduction in the national deficit between fiscal years 2020 and 2022; while the deficit did shrink during that time period, that is largely because emergency measures put into place during the COVID-19 pandemic expired.
The White House did not immediately respond to a FOX Business request for comment.
Even more worrisome is that the spike in interest rates over the past year and a half has made the cost of servicing the national debt more expensive.
That is because as interest rates rise, the federal government’s borrowing costs on its debt will also increase. In fact, interest payments on the national debt are projected to be the fastest-growing part of the federal budget over the next three decades, according to the CRFB.
Payments are expected to triple from nearly $475 billion in fiscal year 2022 to a stunning $1.4 trillion in 2032. By 2053, the interest payments are projected to surge to $5.4 trillion. To put that into perspective, that will be more than the U.S. spends on Social Security, Medicare, Medicaid and all other mandatory and discretionary spending programs.
“We are clearly on an unsustainable fiscal path,” MacGuineas said. “We need to do better.”
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