National Debt Tops $30T for First Time

Economists aren't in agreement on how big of a deal that is
By Evann Gastaldo,  Newser Staff
Posted Feb 2, 2022 1:34 AM CST
National Debt Tops $30T
President Joe Biden speaks during a meeting to discuss the upcoming Supreme Court vacancy in the Oval Office of the White House, Tuesday, Feb. 1, 2022, in Washington.   (AP Photo/Patrick Semansky)

For the first time ever, the US' gross national debt went above $30 trillion Tuesday. That's up about $7 trillion since the end of 2019, CNN reports. The New York Times calls the milestone an "ominous" warning about America's long-term economic outlook, and notes that it was reached years ahead of prior predictions due to $5 trillion in federal spending (using borrowed money) deployed by the government to assist citizens and businesses amid the COVID-19 pandemic. In December, Congress raised the nation's borrowing limit to $31.4 trillion. Budget deficits have run rampant in recent years, even during Donald Trump's administration, and Sen. Joe Manchin cited the country's "staggering debt" as one reason he couldn't support President Biden's $2 trillion Build Back Better Act.

Republican lawmakers have sounded similar criticism; some experts, too, are raising the alarm, while others say it's not as dramatic as it sounds, especially since the economy is growing, interest rates are down, and US Treasury securities are still being purchased by investors. However, the Federal Reserve is expected to soon launch its first series of interest rate increases since 2015, in an effort to fight inflation, meaning it will soon cost more to borrow. "It doesn't mean a short-term crisis, but it does mean we are going to be poorer in the long term," says one expert who notes that Washington will have a more limited capacity to spend on priorities like fighting climate change. (More national debt stories.)

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