Economy: US debt exceeds $38 trillion

A colossal debt. The national debt of the United States has reached a record level of 38 trillion dollars an alarming increase of $1 trillion in just two months. According to the Peter G. Peterson Foundation, this is the fastest increase in debt since the pandemic. This situation indicates a fiscal management that some experts consider unsustainable for such a large country as the United States.

Key points of this article:

• The U.S. national debt reached a record $38 trillion, an increase of 1 trillion dollars in just two months.
• Interest payments on the national debt amount to approximately $1 trillion annually, illustrating unsustainable fiscal management.

Debt that is growing wildly Thus, the US debt exceeded the mark in 38 trillion dollars which is a rapid increase that worries observers. Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said that the rate of debt accumulation “double the rate of growth since 2000.” Reasons? A combination of deficit spending, rising interest costs, and the economic fallout of the ongoing government shutdown.

Interest payments in terms of public debt now amount to approx 1 trillion dollars annually which is the fastest growing category of spending in the federal budget. Over the past decade, the government has spent 4 trillion dollars on interest, and this figure can reach 14 trillion dollars within the next 10 years, according to the estimates of the authors of the article in Fortune.

The US debt is growing every year…

Closing and Pricing: An Explosive Cocktail Partial suspension the work of the government, which has been going on for the third week, aggravates the situation even more. Every day of the government shutdown contributes to growth short-term costs delays in economic activity and critical fiscal reforms. Previous government shutdowns have cost, according to federal estimates billions of dollars which further increased the debt burden.

Paradoxically, according to some analysts, Donald Trump’s tariff policy generates “significant” income According to the Congressional Budget Office (CBO), Trump’s tariffs bring about 350 billion dollars per year which can reduce the deficit by 4 trillion dollars over the next decade. However, these revenues are not enough to compensate growing debt.

…and despite the Trump administration’s tariffs, the situation is getting worse

Economic consequences and prospects According to a recent report by the Yale Budget Lab, the growth of the federal debt also puts pressure on inflation and interest rates. It can slow economic growth and increase the cost of loans for households and businesses. An analysis by Ernst & Young this year found that rising public debt could lead to job and income losses over time.

Despite the revenues received from tariffs, rating agencies continue to downgrade the credit rating of the United States, citing the unstable fiscal trends and periodic political impasses. This downgrade increases even more cost of borrowing and ultimately raises questions about long-term the position of the US dollar as the world’s reserve currency.

As the debt continues to grow at an alarming rate, experts are calling for responsible fiscal reforms to get the United States back on track. “Adding trillions and trillions to the debt and managing the budget during a crisis is no way for a nation as great as America to manage its finances,” Michael A. Peterson finally concluded. Will lawmakers rise to the challenge?

Source: journalducoin.com