The US national debt surpassed another historic milestone as it topped $38 trillion for the first time this week, as the federal government continues to rack up debt at a record-setting pace.
New data from the Treasury Department released on Wednesday showed that the gross national debt reached $38,019,813,354,700.26 as of Oct. 21.
The $38 trillion milestone comes a little over two months after the US national debt reached $37 trillion for the first time in mid-August, and less than a year after the $36 trillion threshold was breached last December.
America’s debt has grown rapidly over the last decade as the population ages and enrollment in Social Security and Medicare rises.
Another key driver of the surging debt is interest expenses incurred from servicing the federal debt, which have swelled due to higher interest rates put in place to curb inflation as well as the growth in the debt itself.
Michael A. Peterson, CEO of the Peter G. Peterson Foundation, told FOX Business that “reaching $38 trillion in debt during a government shutdown is the latest troubling sign that lawmakers are not meeting their basic fiscal duties.”
“If it seems like we are adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000,” he added.
Peterson noted that the costs of servicing the national debt are rising, as they cost the US about $4 trillion over the last decade and are estimated at $14 trillion in the next 10 years, adding that interest costs “crowd out important public and private investments in our future, harming the economy for every American.”
The federal government ran a roughly $1.8 trillion budget deficit in its latest fiscal year, which ended on Sept. 30, and the projected rise in spending on entitlement programs and debt interest is expected to push deficits even higher in the years ahead.
The nonpartisan Congressional Budget Office (CBO) has projected that the national debt held by the public – an alternative measure preferred by economists in comparing the size of a nation’s debt to its economy in terms of real gross domestic product (GDP) – is set to rise from roughly 100% of GDP in 2025 to 120% of GDP by 2035.
In that timeframe, annual budget deficits are expected to rise to about $2.6 trillion in 2035, with total deficits over the next decade adding $22.7 trillion to the national debt.
High interest costs on the national debt account for a significant portion of the increase, as net interest payments are expected to rise from $1 trillion this year to $1.8 trillion in 2035.
Over the next decade, CBO projects federal spending will total $88 trillion, or 23.6% of GDP, while tax revenue will be over $65 trillion, or 17.5% of GDP.
The level of federal spending projected is well above the historical average of 21.1% of GDP over the last 50 years, while tax revenue is slightly above the 50-year average of 17.3%.
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