The United States Is Adding to the National Debt Faster Than Ever
The United States just marked another unfortunate milestone: surpassing $37 trillion in national debt. This level of indebtedness surpasses the economic output of China and the entire Eurozone, combined. As a percentage of GDP, our debt levels are comparable to those just after World War II. However, unlike that period, the United States is neither in recession nor global war but is instead in an economic expansion and relative peace.
Worse still, U.S. debt accumulation is accelerating relative to historic experience; put another way, we are adding debt faster than ever.
In the 2020s, the U.S. has added debt at a rate of $1 trillion every 5 months, more than twice the rate that has prevailed over the past 25 years. In part, recent debt accumulation reflects the significant deficit spending in response to the COVID-19 pandemic. Yet, in the face of a strong recovery and low unemployment, U.S. deficits remain substantially elevated and are projected to continue growing at a historic rate, while associated interest costs have overtaken all but Social Security as the nation’s largest expenditure.
Looking at recent history, by decade, the U.S. added $1 trillion to the Debt:
- Every 24 months in the 2000s, on average
- Every 11 months in the 2010s, on average
- Every 5 months in the 2020s, on average
The nation's debt is growing at a historic rate and eclipsing all-time highs. Looking ahead, it is critically important for the nation’s leaders to prioritize fiscally responsible policies that put the country on a more sustainable path.
Photo by Jemal Countess/Getty Images for Economic Security Project
Further Reading
With $37 Trillion in Debt, Is the U.S. Headed for More Credit Downgrades?
Three successive downgrades of the U.S. credit rating should alarm elected leaders, but our national debt remains on an unsustainable trajectory.
The Federal Government Has Borrowed Trillions. Who Owns All that Debt?
Most federal debt is owed to domestic holders, but foreign ownership is much higher now than it was about 50 years ago.
The Fed Reduced the Short-Term Rate, but Interest Costs Remain High
High interest rates on U.S. Treasury securities increase the federal government’s borrowing costs.