U.S. debt is nearly $33 trillion. But some economists say not all debt is bad. (2024)

FAQs

U.S. debt is nearly $33 trillion. But some economists say not all debt is bad.? ›

U.S. debt is nearly $33 trillion. But some economists say not all debt is bad. Debt is commonly taken on during states of emergency in order to prevent burdening the public with higher taxes. The U.S. government issues debt in the form of Treasury bonds, bills and notes.

The United States has hit a new milestone that no one will be proud of: our gross national debt just surpassed $33 trillion. 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.

15, 2023, and $32 trillion on June 15, 2023, hitting this accelerated pace. Before that, the $1 trillion move higher from $31 trillion took about eight months. U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 trillion, as of Wednesday.

The government can easily service its debt because of its unlimited taxing authority and ability to issue more US Treasury securities to repay maturing securities.

The federal government needs to borrow money to pay its bills when its ongoing spending activities and investments cannot be funded by federal revenues alone. Decreases in federal revenue are largely due to either a decrease in tax rates or individuals or corporations making less money.

What countries does the U.S. owe money to? The United States owes money to many countries, including Japan, mainland China, the U.K., Ireland, Luxembourg, Brazil, Switzerland and Belgium, among others.

1) Switzerland

Switzerland is a country that, in practically all economic and social metrics, is an example to follow. With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt.

The major international owners of US debt include Japan ($1.1T), China, UK, Belgium, Switzerland, Cayman Islands and smaller amounts from the rest of the world.

America's growing debt is the result of simple math — each year, there is a mismatch between spending and revenues. When the federal government spends more than it takes in, we have to borrow money to cover that annual deficit. And each year's deficit adds to our growing national debt.

Can the US debt ever be paid off? ›

Thus, debt is continually paid down and new debt incurred, to be paid down by creation of new debt, ad infinitum. If total indebtedness as a percentage of the national economy does not grow, this can continue forever.

Interest Rates

Maintaining interest rates at low levels can help stimulate the economy, generate tax revenue, and, ultimately, reduce the national debt. Lower interest rates make it easier for individuals and businesses to borrow money for goods and services, which creates jobs and increases tax revenues.

The U.S. national debt totals about $34 trillion. “That is a really hard number to really understand, right?” said Rachel Snyderman, the director of economic policy at the Bipartisan Policy Center in Washington, D.C. Debt can be a great thing, she said, helping to fund important programs and deal with crises.

It began rising at a fast rate in the 1980's and was accelerated through events like the Iraq Wars and the 2008 Great Recession. Most recently, the debt made another big jump thanks to the pandemic with the federal government spending significantly more than it took in to keep the country running.

The national debt of the U.S. reached a historic milestone by passing $33 trillion for the first time, the U.S. Department of the Treasury said. The level was reached less than two weeks before the federal government faces a potential shutdown over a lack of funding authorization.

Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.

Yellen said she is still “not really concerned about the impact” that recent federal spending programs—including the CHIPS and Science Act that subsidizes semiconductor production and research and the Infrastructure Investment and Jobs Act that authorizes spending on roads, bridges, and other infrastructure projects— ...

Paid back interest-free at the rate of $1 million an hour, $33 trillion would take more than 3,750 years.

The $34 trillion gross federal debt equals debt held by the public plus debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself. Learn more about different ways to measure our national debt.

The public owes 74 percent of the current federal debt. Intragovernmental debt accounts for 26 percent or $5.9 trillion. The public includes foreign investors and foreign governments. These two groups account for 30 percent of the debt.