FX.co ★ Concerns mount as US federal debt tops $35 trillion

The US national debt is ballooning, adding to concerns about its broader consequences. It has already surpassed the critical $35 trillion mark and continues to swell. Since January 2024, the federal debt has surged by $1 trillion, marking an annual increase of $5 billion.

This significant milestone was reached on August 16. According to the US Treasury Department, the federal government currently has $35.001278 trillion in debt. “This is madness,” Tesla CEO Elon Musk commented on his social media platform X.

During the terms of both Donald Trump and Joe Biden, the US national debt skyrocketed by more than 75%. Now, however, as the upcoming election approaches, the issue has taken a back seat. Nevertheless, many experts remain concerned about the potential for further debt escalation.

While Trump was in office, the government accumulated nearly $8 trillion in federal debt. The Biden administration also faced exploding debt, driven by new spending and long-term commitments.

Some officials describe the borrowing as reckless and unrelenting, yet US officials seem to be downplaying these alarming signals and pretending that things are going their way.

The national debt was a topic at the Republican National Convention held in early August. Analysts remain optimistic, hoping for positive changes in the coming weeks when the Democratic Party meets in Chicago.

In recent years, the US government has taken a number of measures to reduce the budget deficit. As a result, the national debt has stabilized at 120% of GDP, down from a peak of 125% in 2020.

Nonetheless, experts are sounding the alarm as the 120% debt-to-GDP ratio represents a level of debt not seen since World War II. In addition, the Congressional Budget Office anticipates rising interest costs. Its projections suggest that the US debt could reach 166% of GDP by 2054. Notably, by early 2024, spending on servicing the national debt eclipsed military spending.