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US national debt grows by almost $6 billion every day in 2022

US national debt grows by almost $6 billion every day in 2022

The US national debt has long been considered sustainable due to prolonged low-interest rates; however, with continuous rate hikes, the US debt woes may worsen. Namely, the US debt exceeded $31 trillion for the first time on October 4, an ominous milestone in American economic history. 

Using a web archive tool, Finbold determined that the US debt was $29.48 trillion as of January 1, 2022, and using the available data from the US Debt clock page, the current US debt was determined to be $31.04 trillion as of October 5.

According to the calculations, an alarming $5.6 billion is added to the US national debt per day in 2022, which is an alarming sum for anybody invested in the future of the US.

US debt October 2022. Source: USDebtClock.org 

The continued growth of entitlements

Budget legislation signed into law by President Trump with continued growth in entitlements and higher interest rates should have doubled the US debt by 2029, roughly the size of the entire US economy. 

However, due to spending during Covid, the debt doubling is expected to occur at midcentury unless President Biden’s legislation accelerates it further. Namely, Biden promised to spend additional trillions to reshape the post-pandemic economy, which could ensure that tackling debt in the future will require serious political decessions like an increase in taxes and curbing various expenses.  

Meanwhile, mandatory spending is making the lives of US citizens easier; therefore, curbing these entitlements could equal political suicide, as $4.8 trillion in expenses would have to be reduced. 

US budget mandatory spending. Source: Cbo.gov

Highest in the world

The US’s debt to gross domestic product (GDP) is the highest in the developed world, only behind Japan among other major industrialized countries. Pandemic-related spending pushed debt as a percentage of GDP worldwide from 75% to nearly 95%, driven mainly by debt incurred by the US, UK, Canada, France, Italy, Japan, and Spain. 

While optimists may believe that the US has almost limitless ability to raise debt as it enjoys a high trust in the eye of investors with its strong economy, pessimists might say that debt doesn’t matter until it does, and then it is too late. Time will tell which of these two were more precinct with their view on debt.  

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