In September, the United States broke its national debt record, reaching $33 trillion. Now, just three months later, a new record has been set. CNN Business notes that, per year-end figures released by the Treasury Department last month, our government's debt shot up to $34.001 trillion on Dec. 29, which Maya MacGuineas, head of the watchdog group Committee for a Responsible Federal Budget, calls "a truly depressing 'achievement.'" She adds in a Tuesday statement: "Though our level of debt is dangerous for both our economy and for national security, America just cannot stop borrowing."
The New York Times calls the $34 trillion number one that's "hard to grasp," and it points the finger at both major political parties for contributing to it: the GOP for passing big tax cuts, the Democrats for passing major health care and climate initiatives, and both for doling out money to Americans during the worst of COVID. When inflation and interest rates were much lower, the debt wasn't as much of an issue. Now, however, high interest rates have made servicing our debt much more challenging, with the US forking over $2 billion daily in interest payments alone, per the bipartisan Peter G. Peterson Foundation.
That takes money away from other programs that could be used for health care or the military, among other programs. "Serious deficit reduction, a bad idea a decade ago, is a good idea now," economist Paul Krugman, asserted in October, per the Times. So how do we bring this debt down? It won't be easy. "The ideas that smart people have on the table are at best Hail Marys," economics expert Jim Tankersley tells the Times' Daily podcast.
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MacGuineas has some proposals. "We remain hopeful that policymakers will take further measures to reduce our borrowing either by raising taxes, reducing spending, or creating a fiscal commission—or ideally by doing all of the above," she tells CNN. The Times warns, however, that "the federal government will likely need to raise taxes and cut spending in ways that many Americans will find unpleasant." The AP has more on how we got to this point, how it affects our economy, and how it could affect all of us personally. (More national debt stories.)
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