Real-time monitoring data from the official website of the U.S. Department of the Treasury on July 29, local time, showed that the total debt of the U.S. federal government has exceeded the new mark of 35 trillion U.S. dollars, setting another record high.
Screenshot of data from the official website of the U.S. Department of the Treasury
In just half a year since it "broke through" the $34 trillion threshold in January this year, the U.S. debt has increased by $1 trillion, which can be called "amazing speed." It's just that such "super speed" arouses not admiration, but real worry.
The unfinished “usury”
What does the huge debt of 35 trillion US dollars mean to the United States?
According to the Peterson Foundation, an independent U.S. economic research think tank, the large and growing debt "is threatening the economic future of the United States" because long-standing "structural drivers" have led to U.S. fiscal policy. On an "unsustainable path."
Screenshot of the official website of the Peterson Foundation
In order to illustrate the problem, this think tank gave a series of shocking data:
If the debt of 35 trillion US dollars is distributed to the American people, it is equivalent to a debt of 266,000 US dollars per household and a debt of 104,000 per person. Dollar.
Even if each American household contributes US$1,000 per month, it will take 22 years to repay this huge debt.
Peterson Foundation chart
Where did so much debt come from?
Simply put, it is the result of the United States relying on the hegemony of the US dollar to print and spend large amounts of money. Due to the frequent policy measures adopted by the Democratic and Republican parties to cut taxes or increase spending over the years, the U.S. federal government's fiscal deficit has continued to rise.
According to the latest forecast of the US Congressional Budget Office, the US federal government budget deficit will reach an "astonishing" US$1.9 trillion in fiscal year 2024, an increase of 27% from the February forecast, which is equivalent to an increase of US$400 billion, accounting for 10% of the US domestic budget deficit. 6.7% of gross product (gdp).
The report pointed out that the main driving force for this increase is the more than 2 trillion US dollars in fiscal expenditures associated with the record 138 executive orders issued by President Biden over the past three years and more.
To make matters worse, interest costs on U.S. debt have surged by $540 billion since Biden took office. The ratio of debt interest expenditures to federal fiscal revenue is expected to double from 9% in 2021 to 18% this year, and will increase to 23% ten years later (2034).
Screenshot of the official website of the U.S. Congressional Budget Office
The national debt of the United States includes two parts: "public debt" and "government self-held debt", which are equivalent to the "debts owed to others" and "debts owed to itself" by the U.S. government respectively.
Among them, what really attracts the attention of the outside world is the "public debt" that accounts for the majority, that is, the securities issued by the U.S. government to entities such as individuals, companies, state or local governments, the Federal Reserve Bank, and foreign governments.
Currently, this part of the debt has reached 28 trillion US dollars.
Peterson Foundation Chart
According to the Wall Street Journal, only a dozen years ago, the total public debt of the United States was only equivalent to about 70% of GDP. But with the surge in bond issuance, U.S. public debt has been roughly equal to GDP this year.
It is expected that by 2028, this proportion will reach 106%, which is equivalent to the huge war bond issuance during World War II.
By 2034, ten years later, if the U.S. government does not change its revenue and expenditure policy, public debt is expected to reach 122% of GDP, a record high.
Screenshot of "Wall Street Journal" report
Although the United States has become accustomed to relying on debt to survive, what is different now is that most of the debt borrowing in the past occurred during periods of low interest rates, and the latest round of aggressive interest rate increases in the United States has turned U.S. debt into The "loan shark" that tortures oneself.
The U.S. Congressional Budget Office predicts that due to high interest rates and other reasons, the U.S. federal government will spend $892 billion in this fiscal year to pay interest on the $28 trillion public debt, which means that debt interest payments have now exceeded America’s military spending is huge and will soon catch up with Medicare spending.
"Wall Street Journal" report screenshot
"We can't always pretend that this is not a problem"
According to calculations by the Peterson Foundation, the U.S. government currently needs to pay about US$2 billion in interest every day on its huge national debt; in the next ten years, the U.S. government will have to pay debt interest will exceed the combined spending on R&D, infrastructure and education.
Peterson Foundation Chart
If this money can be used to invest in the future of the United States, $35 trillion is enough to enable all American high school graduates to complete four-year public universities for 103 consecutive years.
Peterson Foundation Chart
In an interview with US media, Larry Fink, CEO of BlackRock, one of the world's largest asset management groups, described the US$35 trillion debt as... "A heavy burden on our children's backs."
He believes that the United States must find ways to minimize the impact of the fiscal deficit and maintain economic growth and effective output. "Otherwise, it may pass on a huge and unbearable burden to the next generation."
Screenshot of a US Fortune magazine report
However, similar suggestions or warnings will have almost no effect in today's politically polarized and fiercely partisan America.
Although both Democrats and Republicans acknowledge the need to reduce debt, their ideas on debt reduction are incompatible.
The White House and Democrats accuse the Republican Party of tax cuts that have served large companies and the wealthy for many years, resulting in increasing debt, and advocate changing tax cuts to tax increases; while the Republicans accuse the Biden administration of irresponsible spending. The culprit behind the mounting debt is trying to choke the White House's purse strings.
Screenshot of the Associated Press report
On the surface, both sides seem to be arguing for the "national future"; but fundamentally speaking, the main reason for the long-term and barbaric growth of the U.S. debt is precisely the two parties' indifference to this "man-made crisis" .
The outside world has noticed that in the campaigns of the two parties in the United States surrounding this year’s election, the debt issue was hardly mentioned by either party.
"The New York Times " reported that the reality that the total debt exceeded 35 trillion US dollars for the first time once again highlighted the severe financial difficulties of the United States. However, as debt continues to increase, neither Vice President Harris, who is expected to win the Democratic presidential nomination, nor former President Trump, who has become the Republican presidential candidate, barely mentioned their support for the debt during the campaign. What are your thoughts and countermeasures?
"This shows that the U.S. economy will only worsen in the next few years."
"New York Times" report screenshot
On the one hand, years of consecutive fiscal deficits have made the U.S. debt pile higher and higher, like a sword of Damocles. Hanging high above their heads; on the other side, politicians from both parties who are obsessed with seeking personal gain have collectively turned a blind eye to this huge threat.
This situation is causing great concern to more and more American political and business people and economists.
Michael Peterson, CEO of the Peterson Foundation, issued a statement warning: "The debt of more than $35 trillion is a stark reminder that we need to take the future of America's finances seriously. What's even worse is that there is now less than 10 days left before the election. 100 days, and even in that short period of time, the U.S. debt may increase by another $1 trillion. We can't always pretend that this is not a problem.”
Screenshot of the official website of the Peterson Foundation
