For the first time on Tuesday, the U.S. national debt surpassed $22 trillion, a new milestone that experts warn could have a knock-on effect and threaten economic security.
The Treasury Department’s daily statement showed that total outstanding public debt stands at $22.01 trillion, as compared to $19.95 trillion when President Donald Trump assumed power on January 20, 2017, reports the AFP.
The national debt is the total of the annual budget deficits. The Congressional Budget Office is projecting that this year’s deficit will be $897 billion, that is, a 15.1 per cent increase over last year’s imbalance of $779 billion.
The deficit will keep increasing, and will top $1 trillion annually beginning in 2022 due to the rising cost of entitlement programs like Social Security and Medicare as the generation of baby boomers continue to retire, the CBO adds.
The national debt has been increasing at a faster rate following the passage of Trump’s $1.5 trillion tax-cut package about a year ago. The rising figure is also due to the result of congressional efforts to increase spending on domestic and military programs, reports the USA Today.
The report said the nation has added more than $1 trillion in debt in the last 11 months alone.
Experts have warned that the rising debt figures are worrying as it could “push up interest rates for consumers and businesses.”
“The higher rates can ripple through the economy, nudging up rates for mortgages, corporate bonds and other types of consumer and business loans,” the USA Today said in its analysis.
Further, a rising debt can make it difficult for the government to respond to a financial crisis through tax cuts or allocate more money to help the poor, workers, and so on, other experts warn.
The Peterson Foundation said the rising national debt is “the latest sign that our fiscal situation is not only unsustainable but accelerating.”
The group has called for reducing the national debt to ensure the nation’s long-term financial health, reports Market Watch.
“We already pay an average of $1 billion every day in interest on the debt, and will spend a staggering $7 trillion in interest costs over the next decade,” said Michael Peterson, CEO of the foundation.
“In order to build