The United States Begins The Fiscal Year With A Record $31 Trillion In Debt

A U.S. Treasury report released Tuesday states that the country’s gross national debt has reached $31 trillion. The gross national debt of the country has topped $31 trillion, according to a U.S. Treasury report that tracks the country’s daily financial activities and was released on Tuesday.

The debt numbers hammer a fragile economy with high inflation, rising interest rates, and a strong U.S. dollar. The debt numbers are getting closer to the statutory ceiling of nearly $31.4 trillion, an artificial cap Congress imposed on the U.S. government’s ability to borrow.

The so-called Inflation Reduction Act, which aims to curb 40-year high price increases brought on by various economic factors, was recently signed by President Joe Biden, who has praised his administration’s efforts to reduce the deficit this year. However, economists say the most recent debt figures are cause for concern. You can check the latest news on our website Lee Daily.

According to Princeton economist Owen Zidar, rising interest rates will compound the country’s mounting debt problems and raise the cost of the debt itself. To battle inflation, the Federal Reserve has increased rates five times this year.

The debt, in Zidar’s opinion, “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” such as raising taxes on the wealthy and closing the carried interest loophole, which permits money managers to treat their income as capital gains.

The US starts the new fiscal year with a record debt of $31 trillion
The U.S. starts the new fiscal year with a record debt of $31 trillion

If you weren’t concerned about your debt before, Zidar said, “I think the idea is that you should be, and if you were, you should be even more concerned.”

The Congressional Budget Office published a report on America’s debt load earlier this year. Its 30-year projection warned that, if the problem is not addressed, the debt will soon rocket higher to new highs, endangering the U.S. economy.

According to the administration’s August Mid-Session Review, this year’s budget deficit will be almost $400 billion less than projected in March. This is large because of higher-than-anticipated revenues, lower spending, and an economy that has restored all the jobs lost during the multi-year pandemic.

According to the Office of Management and Budget, this year’s deficit will decrease by $1.7 trillion in total, which will be the single-largest decrease in the federal deficit in American history.

“This is a new record no one should be proud of,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, in a statement sent by email on Tuesday.

In the previous 18 months, according to MacGuineas, “we’ve seen inflation increase to a 40-year high, interest rates rise to battle this inflation, and many budget-busting pieces of legislation and executive actions.” “We are dependent on debt.”

A Treasury Department representative was not immediately available for comment.

It took our country 200 years to accumulate its first trillion dollars in national debt. Since the epidemic, we have been adding at the rate of 1 trillion virtually every quarter, according to Sung Won Sohn, an economics professor at Loyola Marymount University.

He stated that increasing government expenditure and the money supply would result in higher inflation in the “near future.”

Final Thoughts:

The U.S. national debt has gone over $31 trillion for the first time. This is a big milestone that comes at a time of historically high inflation, rising interest rates, and growing economic uncertainty. On Monday, the total amount of public debt owed by the country was $31.1 trillion, according to data from the Treasury Department that came out Tuesday.

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