US national debt reaches record $22 trillionPosted by Robert Leonard / February 14, 2019
The public debt of the U.S. government has now hit a record $22 trillion for the first time in its history. The new report from the Treasury Department was released today, as reported by NPR.
The news was reported together with data from the Treasury that tax revenue has been dropping and federal spending is on the rise. The public debt has risen more than $2 trillion since the day President Trump first took office in January of 2017.
According to the Congressional Budget Office, the United States is projected to accrue annual deficits not seen since the 1940s. This is all despite the US economy experiencing the second-longest economic growth since WWII.
Deficits Expected to Rise Further
The Treasury has said that over the next 10 years, the annual deficits are expected to average around $1.2 trillion per year or 4.4 percent of the gross domestic product. That’s far higher than the 2.9 percent of GDP which was the norm for the past 50 years.
The only other time the annual deficit as a percentage of GDP was so large was during the Great Recession. Although the deficit spending hike began under President Obama, Trump has continued this same trend without much talk of slowing down.
When looked at compared to the entire U.S. economy, the national debt is valued at around 78 percent of the entire economy in 2018. However, the Congressional Budget Office expects this number to balloon to 93 percent by 2029. It is then, the Office predicts, that the public debt will reach around $28.7 trillion. Bear in mind, however, that this does not include the intragovernmental holdings which the federal government owes to its constituents. These numbers are valued at around $5.5 trillion.
The numbers are truly staggering. Despite these ballooning numbers, however, President Trump seems unlikely to address them directly. Running his campaign on reducing the public debt, Trump said in 2016 that Obama had “bankrupted our country” with deficit spending. Yet, the President has now continued this same trend.
Although President Trump planned to pay off deficit spending with the tariffs on goods, the revenue generated on these tariffs has barely put a dent in the amount of public debt. White House budget director Mike Mulvaney has said that the “the president is very much aware of the realities presented by our national debt,” when asked about it in October. Mulvaney proceeded to argue that these numbers would be “offset” by economic growth which has as of now has not materialized.
Increased deficit spending during economic growth is relatively uncommon, and the Trump Administration seems to be ignoring this serious problem. However, economists are divided on how to best approach the problem, and even whether the problem is an issue at all.
Public debt, after all, is not like private debt: the government generally does not default on their owed money, especially if that government is the United States government. Japan, for example, has public debt numbers double that of their GDP.
We can likely expect a response from the President in the coming weeks on this report from the Treasury.