Recent Additions To The Public Debt Of The United States
On July 29, 2016, the BEA released a revision to 20132016 GDP figures. The figures for this table were corrected the next week with changes to figures in those fiscal years.
On July 30, 2015, the BEA released a revision to 20122015 GDP figures. The figures for this table were corrected on that day with changes to FY 2013 and 2014, but not 2015 as FY 2015 is updated within a week with the release of debt totals for July 31, 2015.
On June 25, 2014, the BEA announced a 15-year revision of GDP figures would take place on July 31, 2014. The figures for this table were corrected after that date with changes to FY 2000, 2003, 2008, 2012, 2013 and 2014. The more precise FY 19992014 debt figures are derived from Treasury audit results. The variations in the 1990s and FY 2015 figures are due to double-sourced or relatively preliminary GDP figures respectively. A comprehensive revision GDP revision dated July 31, 2013 was described on the Bureau of Economic Analysis website. In November 2013 the total debt and yearly debt as a percentage of GDP columns of this table were changed to reflect those revised GDP figures.
Tracking The Federal Deficit: December 2021
The Congressional Budget Office estimates that the federal government ran a deficit of $20 billion in December 2021, the third month of fiscal year 2022. This deficit was the difference between $486 billion in revenues and $507 billion of spending. Decembers deficit was 85% smaller than that of December 2020. Additionally, both this year and last year, the timing of the New Years Day federal holiday shifted payments that would normally have occurred at the beginning of January into December. In the absence of these timing shifts, the federal government would have run a monthly surplus in December 2021 for the first time since January 2020, prior to the onset of the COVID-19 pandemic.
Analysis of notable trends: Through the first quarter of FY2022, the federal government has run a deficit of $377 billion, $196 billion less than at this point in FY2021. After factoring in the aforementioned timing shifts, the FY2022 deficit to date is $353 billion, or 33% smaller than FY2021the rest of this discussion accounts for these payment shifts. However, this deficit is $17 billion larger than the deficit accrued during the first quarter of FY2020, before the start of the pandemic.
Us Debt Burden To Rise To 185% Of Gdp In 2052 Cbo Projects
The Federal Reserve building is pictured in Washington, D.C., U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo
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WASHINGTON, July 27 – The U.S. federal debt burden will reach 185% of economic output in 2052, the Congressional Budget Office projected on Wednesday, an improvement over last year’s long-term estimate but a projection marked by exponentially higher interest costs and weak population growth.
The CBO in 2021 had projected federal debt in 2051 at 202% of U.S. GDP output, with this year’s improvement due to a strong recovery from the COVID-19 pandemic. The estimates assume current tax and spending laws remain in place over the next 30 years.
The CBO estimated U.S. net interest outlays as a percentage of GDP to rise to 7.2% in 2052 versus 1.6% this year.
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This is driven both by the growing size of the debt and higher interest rates over the next 30 years, the non-partisan fiscal referee agency said. The average interest rate on federal debt is expected to grow from 1.8% in 2022 to 3.1% in 2032 and 4.2% in 2052.
While the 2022 budget deficit is expected to be significantly smaller as a share of the economy — 3.9% — than during the high COVID-19 pandemic spending years of 2020 and 2021, deficits grow significantly in subsequent years, reaching 11.1% of GDP in 2052.
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Tracking The Federal Deficit: June 2021
The Congressional Budget Office estimates that the federal government ran a deficit of $173 billion in June, the ninth month of fiscal year 2021. Junes deficit was the difference between $450 billion in revenue and $623 billion in spending.
So far this fiscal year, the federal government has run a cumulative deficit of $2.2 trillion, the difference between $3.1 trillion in revenue and $5.3 trillion in spending. This deficit is nearly triple the shortfall over the same period in FY2019 , but is 19% lower than at the same point in FY2020. This is the first time in FY2021 that the cumulative deficit has decreased year-over-year.
Analysis of Notable Trends: Thus far in FY2021, year-over-year comparisons of deficit levels have largely reflected the trajectory of the COVID-19 pandemic and subsequent federal response. BPC expects this trend to continue through the rest of the fiscal year.
Cumulative year-to-date outlays are up 6% compared to the first nine months of FY2020 and are 58% greater than at this point in FY2019. These changes are indicative of continued spending towards COVID-19 relief programsin particular, refundable tax credits and supplemental unemployment compensationas every month to date in the current fiscal year has contained pandemic-related expenditures, whereas only March-June did for the relevant period last year.
Drawback Of Measuring Debt By President
Neither of the techniques mentioned above is a very accurate way to measure each president’s impact on the national debt because the president doesn’t have much control over the national debt during their first year in office.
For example, President Donald Trump took office in January 2017. He submitted his first budget in May. It covered the 2018 fiscal year, which didn’t begin until October 1, 2017. Trump operated the first part of his term under President Barack Obama’s budget for fiscal year 2017, which ended on Sept. 30, 2017.
While the time lag may make it seem confusing, Congress intentionally sets it up this way. An advantage of the federal fiscal year is that it gives the new president time to put together their budget during their first months in office.
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Tracking The Federal Deficit: November 2018
The Congressional Budget Office reported that the federal government generated a $203 billion deficit in November, the second month of Fiscal Year 2019, for a total deficit of $303 billion so far this fiscal year. If not for timing shifts of certain payments, the deficit in November would have been roughly $158 billion, according to CBO. Novembers deficit is 46 percent higher than the deficit recorded a year earlier in November 2017. Total revenues so far in Fiscal Year 2019 increased by 3 percent , while spending increased by 18 percent , compared to the same period last year.
Analysis of Notable Trends in November 2018: Department of Homeland Security spending fell by 46 percent relative to November 2017, reflecting a decrease in spending on disaster relief. Conversely, Social Security spending increased by 5 percent compared to November 2017.
Taking National Debt Personally
While voters are not fans of national debt on principle, the debt-to-GDP ratio makes for a lackluster rallying point in practice, since even economists can’t agree on what percentage is too high.
Hence efforts to frame the national debt burden in easily understood terms. One popular tactic is to divide national debt by the population to determine debt per capita. Dividing the U.S. national debt of $30.5 trillion as of July 2022 by an estimated U.S. population of 332.4 million as of Jan. 1, 2022 yields national debt per capita of nearly $92,000, which sounds like a lot.
Fortunately, the per capita apportionment of government debt ignores the fact that no individual, not even a child, can hope to repay debt in a currency they create, the way the U.S. government and many other sovereign borrowers do. The improbability of default by a sovereign borrowing in its own currency is what marks out such debt as a “safe asset” relative to credit issued to private borrowers. In this sense, national debt can be thought of as an interest-bearing currency supplementing the interest-free banknotes. Like currency, national debt is a government obligation serving as an asset and store of value for its owners.
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Tracking The Federal Deficit: May 2020
The Congressional Budget Office reported that the federal government ran a deficit of $399 billion in May, the eighth month of fiscal year 2020. This represents almost double the monthly deficit recorded in May 2019. So far this fiscal year, the budget deficit has mounted to $1.88 trillion, more than two-and-a-half times as large as at this point last year . Total revenues so far this fiscal year are down 11% compared to the same point last year, while outlays are up 29% .
Analysis of notable trends: CBO notes that the fiscal year so far can be split into two distinct parts: one before the new coronavirus had affected economic output and federal finances and one in which the pandemic had ravaged both . In the pre-coronavirus part of the year, outlays and revenues were each higher than at the same point last year. During the past two months, however, outlays soared while revenues evaporated .
Outlays have surged in response to the health emergency itself and the resulting economic fallout: for example, spending on unemployment insurance soared from $2 billion last May to $93 billion this May spending on refundable tax credits surged from $3 billion last May to $53 billion this May outlays from the Small Business Administration rose from $98 million last May to $35 billion this May and spending on the Public Health Social Services Emergency Fund climbed from $250 million last May to $27 billion this May.
What Is National Debt
National debt denotes the outstanding obligations of a country. Such obligations may also be called government debt, federal debt, or public debt.
The national debt of the United States is what the federal government owes creditorsincluding debt held by the public and federal government trust funds. U.S. national debt totaled $30.5 trillion as of July 15, 2022.
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Concerns Over Chinese Holdings Of Us Debt
According to a 2013 Forbes article, many American and other economic analysts have expressed concerns on account of the People’s Republic of China’s “extensive” holdings of United States government debt as part of their reserves. The National Defense Authorization Act of FY2012 included a provision requiring the Secretary of Defense to conduct a “national security risk assessment of U.S. federal debt held by China.” The department issued its report in July 2012, stating that “attempting to use U.S. Treasury securities as a coercive tool would have limited effect and likely would do more harm to China than to the United States. An August 19, 2013 Congressional Research Service report said that the threat is not credible and the effect would be limited even if carried out. The report said that the threat would not offer “China deterrence options, whether in the diplomatic, military, or economic realms, and this would remain true both in peacetime and in scenarios of crisis or war.”
Tracking The Federal Deficit: February 2019
The Congressional Budget Office reported that the federal government generated a $227 billion deficit in February, the fifth month of Fiscal Year 2019, for a total deficit of $537 billion so far this fiscal year. Februarys deficit is 5 percent higher than the deficit recorded a year earlier in February 2018. Total revenues so far in Fiscal Year 2019 decreased by 0.3 percent , while spending increased by 8.5 percent , compared to the same period last year.
Analysis of Notable Trends this Fiscal Year to Date: Income tax refunds were down by 10 percent from October-February 2019 compared to the same period in Fiscal Year 2018, and corporate income tax receipts were down by 19 percent from October-February 2019 relative to the same period in Fiscal Year 2018. The dip in corporate revenues is primarily attributable to the Tax Cuts and Jobs Act of 2017. On the spending side, Department of Homeland Security outlays decreased by 31 percent due to a relative decrease in disaster spending versus last year. Conversely, net interest payments on the national debt were up 15 percent from October-February 2019 compared to the same period in Fiscal Year 2018.
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Interest And Debt Service Costs
Despite rising debt levels, interest costs have remained at approximately 2008 levels because of lower than long-term interest rates paid on government debt in recent years. The federal debt at the end of the 2018/19 fiscal year was $22.7 trillion. The portion that is held by the public was $16.8 trillion. Neither figure includes approximately $2.5 trillion owed to the government. Interest on the debt was $404 billion.
The cost of servicing the U.S. national debt can be measured in various ways. The CBO analyzes net interest as a percentage of GDP, with a higher percentage indicating a higher interest payment burden. During 2015, this was 1.3% GDP, close to the record low 1.2% of the 19661968 era. The average from 1966 to 2015 was 2.0% of GDP. However, the CBO estimated in 2016 that the interest amounts and % GDP will increase significantly over the following decade as both interest rates and debt levels rise: “Interest payments on that debt represent a large and rapidly growing expense of the federal government. CBO’s baseline shows net interest payments more than tripling under current law, climbing from $231 billion in 2014, or 1.3% of GDP, to $799 billion in 2024, or 3.0% of GDPthe highest ratio since 1996.”
According to a study by the Committee for a Responsible Federal Budget , the U.S. government will spend more on servicing their debts than they do for their national defense budget by 2024.
The Politics Of National Debt
Disagreements about national debt have repeatedly preoccupied U.S. Congress. Whenever the national debt approaches the limit periodically reset by Congress, lawmakers are faced with a choice of raising the ceiling once again or letting the U.S. government default on its obligations, risking dire economic consequences. The U.S. government briefly shut down before Congress raised the limit in 2013. A similar standoff two years earlier led Standard & Poor’s to downgrade its U.S. credit rating.
In 2021, Congress narrowly averted a scheduled Oct. 1 government shutdown by passing a short-term funding bill, then raised the U.S. debt ceiling by $2.5 trillion to $31.4 trillion in December. That limit was expected to be reached in early 2023.
Americans profess to be concerned about the national debt in poll after poll, while also overwhelmingly supporting defense spending and outlays for Social Security and Medicare, and opposing tax increases.
As a result, elected officials too have been eager to be seen to be addressing the national debt, usually without linking it to the spending the debt enables or to the tax increases that a balanced budget would require.
The National Debt Increased In United States
In 2020 United States public debt was 24,610,805 million euros28,047,286 million dollars, has increased 3,838,8924,793,960 million since2019.
This amount means that the debt in 2020 reached 134.24% of United States GDP, a 25.44 percentage point rise from 2019, when it was 108.8% of GDP.
If we check the tables we can see the evolution of United States debt. It has risen since 2010 in global debt terms, when it was 10,817,419 million euros 14,325,908 million dollars and also in terms of GDP percentage, when it amounted to 95.2%.
According to the last data point published, United States per capita debt in 2020 was 74,300 euros84,675 dollars per inhabitant. In 2019 it was 63,224 euros 70,776 dollars, afterwards rising by 11,076 euros13,899 dollars, and if we again check 2010 we can see that then the debt per person was 34,968 euros46,310 dollars .
The position of United States, as compared with the rest of the world, has remained in 2020 in terms of GDP percentage. Currently it is country number 179 in the list of debt to GDP and 188 in debt per capita, out of the 190 we publish.
In this page we show you the progression of the public debt in United States. You can see debt in other countries in Public debt and see all the information about United States in economy of United States.
How Can We Reduce The National Debt
To reduce the debt, the country could raise taxes and/or cut spending. These are two of the tools of contractionary fiscal policy, and either tactic could slow economic growth.
Spending cuts come with pitfalls though. In 2021, government spending was 30% of GDP, which is the value of all goods and services produced in a country in a given year. If the government cuts spending too much, GDP will drop and economic growth will slow. That leads to less revenue and a larger deficit.
Tax increases can also slow economic growth. One study found that a tax increase of 1% lowers real GDP by about 3%. The real GDP is an inflation-adjusted measure that simplifies tracking the GDP from year to year.
Most governments can safely finance their deficits with the help of government bonds instead of balancing the budget.
As long as the debt is below the tipping point, creditors have confidence that the government will repay them. The tipping point is when the amount of public debt hinders a country’s ability to grow economically. When debt is moderate, government interest rates can remain low and that allows governments to keep running deficits for years.
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One reason we cut corporate taxes was to make US companies more competitive. It worked. Do we really want to lose that? Not to mention what it will likely do to the stock market. Just saying
2. Debt is future income brought forward. There is a point at which debt becomes a drag on US economic growth, and we have likely reached it.
GDP growth in the US is going to increasingly look like Japan and/or Europe, i.e., almost nil. So, the CBOs continued 2% average growth forecasts will simply get thrown out the window and the deficits will get worse.
Dont shoot me Im just the messenger.
3. It is possible Im being overly pessimistic about the need for a Great Reset which would include national debt. Japan reached 250% debt to GDP a few years ago, since which the Bank of Japan bought around half of total government debt , and Japan is doing just fine. The European Central Bank is buying anything not nailed down and is muddling through.
4. Let me point out that, while the practical results of quantitative easing look similar to modern monetary theory , the actual results and practice are completely different. I am not persuaded that the US Congress can understand the difference. Dear gods, I hope they can.
I was just explaining this to a friend. He asked me what we should do, somehow believing that there has to be an answer. There isnt one.
We have no good choices left. It is as if we are on a trip through a desert and know for certain we dont have enough water to go back.