As of Tuesday, the US national debt had surpassed 22 trillion for the first time in history.
This increase raises alarm as experts warn that it is a sign that the country is on an unstable financial path that could jeopardize the economic security of the nation.
Reports from the treasury department indicate an increase of more than $30 billion in debt just this month and $1 trillion in the last 11 months alone raising the overall number to $22.012 trillion. This rise follows the passing of the president’s $1.5 trillion tax-cut packages about a year ago and is also as a result of increased spending on domestic and military programs.
“Reaching this unfortunate milestone rapidly is the latest sign that our fiscal situation is not only unsustainable but accelerating,” said Michael A. Paterson, chief executive officer of the Peter G Peterson Foundation. Peterson Foundation is a non-partisan organization working to solve the country’s long-term fiscal challenges.
This debt-increase is a genuine reason for alarm as experts say that it can push up interest rates for both consumers and businesses over time. These higher rates could have a chain effect causing an increase in the rate of mortgages, corporate bonds and other types of consumer and business loans. This increase could also lead to the inability of the government to dispense money for programs like retraining more workers and helping the poor.
Peterson attributed the increasing national debt to “a structural mismatch between spending and revenues” with the biggest drivers being the elderly class, growing interest payment, and expensive healthcare.
The actions of the government, which were described as “fiscal recklessness” by Judd Gregg and Edward Rendell, co-chairman of the non-partisan Committee for a Responsible Federal Budget, could see the debt jump by another $1 trillion before the end of 2019. Rendell and Gregg said, “We need responsible leadership to fix the debt, not a worsening of partisanship.”