Breaking the Record as US National Debt Takes Flight to $22 Trillion as Market Speculation Continues
For the first time, the national debt surpassed $22 trillion on Tuesday. Despite a strong economy, the US financial burden is growing and have reached a milestone that experts warn is the further proof that the country is on an unsustainable financial path and this could very well jeopardize the economic security of every citizen.
According to the Treasury Department report, public debt has climbed to more than $22 trillion while obligations of the country are mounting as President Trump debates the Congress members’ over funds for the wall.
Fiscal experts including Federal Reserve Chair Alan Greenspan are warning about the dangers of the rising budget deficit.
“This is an extremely imbalanced situation,”
Greenspan told Bloomberg.
“Politically, budget deficits really don’t matter. What matters is the consequences.”
The ultimate concern for Greenspan, 92 is inflation. The last time the US had to plug a shortfall this large was in the wake of the recession that ended in 2009.
“It is only when eventually the budget deficits, as they always do, engender inflation that you get the political system responding,” Greenspan said. Referring to the mix of high inflation and slow growth, he added, “We see right now the beginnings of stagflation, but we are not there yet.”
Fiscal Situation Unsustainable & Accelerating
For 8 years, under Barack Obama’s administration, US debt rose at an alarming rate. It nearly doubled as it surged to $9.3 trillion during his term. The pace is slow now, but the trajectory of the US debt looks no different.
“Reaching this unfortunate milestone so rapidly is the latest sign that our fiscal situation is not only unsustainable but accelerating,”
said Michael A. Peterson, chief executive officer of the Peter G. Peterson Foundation, a nonpartisan organization working to address the country’s long-term fiscal challenges.
Since Trump took office, the US debt has risen over $42 trillion which is slower than Obama’s pace of borrowing. However, the Fed ain’t buying as they were during Obama's time.
“Net borrowing needs will continue to increase due to the expected increase in the deficit combined with funding needs coming from the Fed’s debt run off,”
said Margaret Kerins, global head of fixed-income strategy at BMO Capital Markets Corp.
At some point, the market will finally focus on the debt picture of America and when it does and when there is another major selloff in the stocks market, it can be said, US Treasury will no longer serve as the
This record-breaking $22 trillion debt according to Judd Gregg and Edward Rendell, co-chairman of the nonpartisan Campaign to Fix the Debt, a project of the nonpartisan Committee for a Responsible Federal Budget,
“is another sad reminder of the inexcusable tab our nation’s leaders continue to run up and will leave for the next generation.”