Federal debt of the United States surpasses $37 trillion, with the 'grandiose, stunning invoice' enabling it to accrue trillions more
The U.S. federal government's gross national debt has reached an unprecedented milestone, surpassing $37 trillion for the first time. This significant figure represents a debt burden of $37,089,430,594,354.58 that American taxpayers are now responsible for, as per the national debt tracker.
The escalating debt is a direct result of the One Big Beautiful Bill Act (OBBBA), which was signed into law by President Donald Trump and has increased the debt limit by an estimated $3 to $4 trillion. The OBBBA was passed through the budget reconciliation process, marking the first time the debt limit has been raised in this manner.
Despite the increase, the OBBBA did not spur a meaningful broader conversation about the unsustainable fiscal trajectory of the country, according to Shai Akabas, vice president of economic policy at the Bipartisan Policy Center. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, expressed concern that the enactment of the most expensive reconciliation bill in history alongside the largest debt limit increase in history shows a lack of seriousness towards fiscal health.
In an attempt to address the potential risks associated with the debt limit, the Responsible Budgeting Act has been proposed. This legislation aims to de-risk the debt limit's potential impact on the economy by allowing for the debt limit to be suspended in exchange for Congress voting on specific debt reduction measures.
However, neither party views the debt limit as an effective tool for fiscal restraint, according to Akabas. Senator Judd Gregg has proposed creating a fiscal commission or similar reforms to change the debt limit in Congress.
Lawmakers may have a couple of years until the debt limit approaches again, providing a window of opportunity to address the unsustainable fiscal trajectory and implement reforms. Ray Dalio, the founder of Bridgewater Associates, has warned of a potential fiscal crisis if the U.S. does not address deficit spending.
The US budget deficit has widened by $109 billion from a year ago, highlighting the need for urgent action to address the country's fiscal health. As the debate continues in Congress and policy circles, the future of the U.S. debt and its impact on the economy remains a topic of great concern.
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