The pandemic brought nothing but distress to the entire world. The importance of life and health took the front stage as millions battled the deadly coronavirus. In addition to this, people across the globe witnessed a financial crunch, and bankruptcy filings were proof of the same. The increased spending during the pandemic has continued to affect several economies and is now reflecting on the US National Debt.
American economic history took a new turn and the US national debt hit a record $31.4 trillion for the very first time. This was in addition to the high inflation and surging interest rates.
According to recent reports, about $5.6 billion is added to the US national debt every day in the year 2022. This is considered to be quite high and terrifying over the long term.
The US debt was at $29.48 trillion on the 1st of January 2022.
US’s Tumultuous economy
The supposed Inflation Reduction Act, which aims to curb 40-year high price increases brought on by a variety of economic factors, was recently signed by President Joe Biden, who has praised his administration’s efforts to reduce the deficit this year. However, economists say the most recent debt figures are a matter of concern.
As mentioned earlier, American economic history hit several milestones this year. Definitely not in a good way. Not too long ago, US inflation rose to a 40-year high which further prompted the increase in interest rates.
Speaking about the US National Debt, Maya MacGuineas, president of the Committee for a Responsible Federal Budget said,
“This is a new record no one should be proud of. In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions. We are addicted to debt.”
Maya MacGuineas
But unless President Biden’s legislation speeds it, even more, the debt double is predicted to happen near the halfway point of the century owing to expenditures during Covid. In particular, Biden pledged to shell out trillions to reform the post-pandemic economy. However, this might guarantee that dealing with debt in the future will necessitate significant political sacrifices like tax increases and spending cuts on numerous bills.