US(Washington Insider Magazine)-WASHINGTON – According to the U.S. Treasury report that tracks America’s daily finances, the country’s gross national debt has reached $31 trillion.
The debt statistics strike an already fragile economy that is dealing with high inflation, increasing interest rates, and a strong U.S. dollar as they get closer to the statutory maximum of nearly $31.4 trillion – an artificial cap Congress put on the U.S. government’s capacity to borrow.
The so-called Inflation Reduction Act, which aims to curb 40-year high price increases brought on by a variety of 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, according to ABC NEWS.
Rising interest rates, according to Princeton economist Owen Zidar, will compound the country’s mounting debt problems and raise the cost of the debt itself. In an effort to battle inflation, the Federal Reserve has increased rates many times this year.
The Congressional Budget Office published a study on America’s debt burden earlier this year, and in its 30-year projection, it issued a warning that, if the problem is not addressed, the debt would soon soar upwards 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 it was projected to be back in March. This is primarily 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 on Tuesday.
Sung Won Sohn, an economics professor at Loyola Marymount University, predicted severe inflation for the “foreseeable future,” stating that “when you increase government spending and money supply, you will pay the price later.”
