The US gross national debt surpassed $33 trillion for the first time in history as the potential government shutdown looms over government spending.
According to data published by the Treasury Department, the national debt hit $33.04 trillion, just months after reaching $32 trillion in mid-June.
President of the Committee for a Responsible Federal Budget, Maya MacGuineas, said the numbers reached “a new milestone that no one will be proud of.”
“Debt held by the public, meanwhile, recently surpassed $26 trillion,” MacGuineas said.
“We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous.”
Last week, the Congressional Budget Office confirmed that the deficit would likely double from the previous fiscal year to this one,
The office warned that high-interest rates and rising national debt could make interest payments spike to 6.7% of GDP by 2053
“Instead of hearing about solutions, we hear promises of which programs our leaders are unwilling to touch and which taxes they are unwilling to raise,” she said.
“That kind of talk is not only pandering, but it’s also downright irresponsible when we have a mess like this on our hands.”
Meanwhile, Republicans proposed a plan that would temporarily fund the government to avoid a shutdown and impose an 8% spending cut on federal agencies, but not defense funding, veterans affairs, and disaster relief,
However, the measure saw opposition opposition from fellow GOP lawmakers.
The chief executive of the budget watchdog group Peter G. Peterson Foundation, Michael A. Peterson, warned of the looming federal crisis.
“As we have seen with recent growth in inflation and interest rates, the cost of debt can mount suddenly and rapidly,” Peterson said.
“With more than $10 trillion of interest costs over the next decade, this compounding fiscal cycle will only continue to do damage to our kids and grandkids.”
Meanwhile, the founder of the hedge fund Universa Investments, Mark Spitznagel, said last month that America is living through the “greatest credit bubble in human history.”
“We’ve never seen anything like this level of total debt and leverage in the system,” Spitznagel said.
“It’s an experiment. But we know that credit bubbles have to pop. We don’t know when, but we know they have to.”
On Monday, US Treasury Secretary Janet Yellen said she wasn’t worried about the staggering deb, claiming the net interest as a share of GDP is “under control.”
“And even with the rise we have seen in interest rates, that remains at a very reasonable level,” Yellen said.
“Certainly, greater deficit reduction is possible,” she added.
“The President has proposed a series of measures that would reduce our deficits over time while investing in the economy, and this is something we need to do going forward.”