The national debt of the United States has surpassed $31 trillion for the first time in history, according to Treasury Department data published on Oct. 4.
President Joe Biden and Congress increased government borrowing amid the COVID-19 pandemic in order to prop up the economy amid job losses and chronic supply chain disruptions, while further borrowing was undertaken to help stimulate the economy coming out of lockdown.
Prior to the pandemic, at the end of 2019, the national debt stood at $22.7 trillion. Just a year later, it had risen to $27.7 trillion and has continued to add gains since.
However, the Committee for a Responsible Federal Budget (CRFB) noted in a statement on Oct. 3 that the United States has now overcome the most severe challenges of the pandemic but that the Biden administration continues to borrow huge amounts of money.
“This is a new record no one should be proud of,” Maya MacGuineas, president of the CRFB, said in a statement. “In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions.”
“Just in 2022, Congress and the President have approved a combined $1.9 trillion in new borrowing, and President Biden has approved $4.9 trillion in new deficits since taking office. We are addicted to debt,” MacGuineas said.
Inflation reached 8.3 percent year-over-year in the United States in August, prompting the Federal Reserve to continue with its aggressive interest rate hikes in order to bring the cost of living down. The Central bank rolled out another 75 basis-point rate hike on Sept. 21.
‘Should Commit to No Further Borrowing In 2022’
However, such hikes make government borrowing more expensive. The budget deficit is expected to be about $1 trillion in 2022.
“Even more troubling than where the debt stands now is where it’s going. Our nation faces significant fiscal challenges in the near term. Medicare is only six years from insolvency, and Social Security insolvency is only 12 years away. Yet policymakers have put forth no plan to put either program on strong fiscal footing,” MacGuineas said.
In an effort to combat inflation, Biden has also rolled out the Inflation Reduction Act which the president says will bring down the costs for Americans on everything from health care to energy.
However, CRFB estimated last month that Biden’s policies and executive actions could add $4.8 trillion to deficits between 2021 and 2031 while warning that excessive borrowing could see inflation skyrocket further and increase the national debt to a new record by 2030.
“As the end of the year approaches, it is time to remind policymakers that whether to grow the national debt further is within their control. At the very least, they should commit to no further borrowing in 2022—it cannot be too much to ask that they practice paying for their priorities by abstaining from any new borrowing for just three months,” MacGuineas said in Monday’s statement. “The $31 trillion in debt is a staggering number that should keep them up at night.”
Despite growing fears over the government’s increased borrowing, Biden has touted his administration for reducing the budget deficit.
“In my first year, I reduced the deficit by $350 billion,” Biden said in September. “The last guy left me with a giant deficit. Well, guess what? In my first year, I reduced the deficit by $350 billion. And you know how much I’m reducing the deficit this year? A one trillion, five hundred thousand reduction of the deficit.”