Record National Debt Raises Concerns, But Average Impact on Individuals May Be Nuance

The national debt of the United States government just passed $34 trillion, setting a new high. But to what extent should you be concerned about the nation's borrowing?

Politicians have been tense over the debt; last year, a debt ceiling agreement kept the country from defaulting.

Both parties were not entirely satisfied with the compromise; liberals were against future expenditure limitations and increased job requirements for food stamp recipients, while conservative members had been pushing for further cutbacks.

Despite the possibility of a government shutdown, ultraconservative legislators have persisted in criticizing spending agreements. A compromise on a short-term funding package that would keep the government operating through March was revealed by congressional leaders on Sunday.

The accord comes after Senate Majority Leader Chuck Schumer, a Democrat from New York, and House Speaker Mike Johnson, a Republican from Louisiana, reached a consensus last week to cap total federal spending for the fiscal year 2024 at $1.66 trillion. Despite demands for even more expenditure cutbacks from right-wing politicians, Johnson stated he had no intention of pulling out of the agreement.

Although economists differ on how concerning the current debt levels are, research indicates that a growing proportion of Americans think something ought to be done about it since federal spending continuously exceeds receipts.

The nation has generally experienced a budget deficit for the previous 50 years, meaning that in any given year, the government spends more money than it brings in. This results in borrowing, which raises the country's debt. Since 1970, the United States has had a deficit in all but four of those years. The most recent budget surplus, or year in which government revenue exceeds expenditure, was in 2001.

According to a 2023 Pew Research Center study, 57% of Americans, up from 45% the year before, said that the president and Congress should make cutting the budget deficit their top priority.

What You Need to Know About the National Debt

The total amount owed by the United States to its creditors, which includes foreign governments, the Federal Reserve System, state and local governments, businesses, individual investors, pension funds, mutual funds, and other parts of the federal government like Social Security, Medicare, and other specialized trust funds, is known as the national debt.

Although the United States has always been in debt, the amount has increased recently due in part to expensive occurrences like the COVID-19 epidemic. The debt load was further exacerbated by tax cuts, government expenditures, stimulus plans, and decreased tax receipts.

Although the $34 trillion sum seems significant, experts advise placing it in perspective.