A surge of federal spending in response to the Covid-19 outbreak has created a new milestone: for the first time in the country’s history, the national debt has surpassed the $30 trillion mark.
According to just-released numbers by the Treasury Department, the national debt increased by around $7 trillion between early 2020 and this year.
Two years ago, the Congressional Budget Office forecast that the country was destined to soon reach the $30 trillion threshold but predicted it would not happen until the end of 2025.
Calling it an “ominous fiscal milestone,” the New York Times said the quickened increase was due almost entirely to a series of massive stimulus efforts undertaken to stabilize the nation’s economy in the wake of the pandemic and national economic shutdown.
The national debt first saw a significant upward tick in the wake of the financial crisis of 2008, leading to the Great Recession, when the numbers went from $10 trillion to nearly $15 trillion.
A generally ascending trend was evident between 2016 and 2020, with the debt climbing from $18 trillion to $23 trillion.
The gain of $7 trillion in the past 24 months, says analysts, is the largest and most swift in history.
In looking at the numbers, the non-partisan New York-based Peter G. Peterson Foundation is estimating that because of the debt, the federal government by the end of the decade will spend “nearly as much on interest payments as it does on research and development, infrastructure, and education combined.”
“This is a jaw-dropping number that is a real cause for concern,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget in Washington, told the Wall Street Journal. MacGuineas added that the debt was due not just to pandemic stimulus spending, but also “trillions and trillions of borrowing for no reason other than politicians have stopped being willing to pay the bills.”
The actual impact of the soaring debt may not be readily seen by most Americans, argues Thomas Taschinger, opinions editor of the Beaumont Enterprise, who notes that interest alone on that debt amounts to $300 billion annually. “Think of what we could do with that money if it weren’t devoted to propping up prior debt.”
In a statement, Michael Peterson, chief executive officer of the Peterson Foundation, acknowledged that the bad news is the $30 trillion debt. But the goods news, he added, is that “the budget is entirely within our control.”
Peterson maintained that the country’s leadership could embrace lower spending policies designed to create a “future that is brighter than the past.”
Added Peterson: “Putting the nation on a strong and sustainable fiscal path will help build a broad-based economic future that enables the hopeful aspirations of the next generation.”
By Garry Boulard
