National Debt Reaching Crisis Proportions, Will Exceed $50 Trillion by 2034

The nation’s debt, which has been on the rise for years, is accelerating rapidly and is predicted to nearly double over the coming decade.

A recent report by the Congressional Budget Office reveals that the national debt crisis in the United States is even worse than previously thought.

The report, released June 18, includes a number of sobering projections, among them that the share of debt held by the public will nearly double over the next decade, from $26.2 trillion at the end of 2023 to $50.7 trillion at the end of 2034. This projection was an increase of over $2 trillion from the CBO’s forecast only four months earlier. In addition, debt held by the public will reach a historically unprecedented 109% of GDP by 2028, which will increase to 122% of GDP by 2034.

Even the CBO projection, however, does not reveal the full scale of the problem, because it only counts debt held by the public. This category includes debts owed to foreign nations, state and local governments, the Federal Reserve, and American citizens, but excludes debts which the government owes to itself, including the Social Security trust fund. The total national debt, including public and intragovernmental debt, is rapidly approaching $35 trillion.

To many Americans, these enormous figures might seem like numbers on paper, detached from their personal economic concerns. But in fact, the national debt does have a heavy impact on people’s lives. As economist E.J. Antoni pointed out earlier this year, the cost of servicing the national debt totals over $1 trillion a year, making it the third largest Treasury expenditure – and this does not even go towards paying off the debt itself, only its interest. This is money which would otherwise go towards helping Americans. What’s more, the debt is largely responsible for recent high inflation and interest rates, which affect all of us on a daily basis.

There are a number of factors responsible for this crisis, but the central problem, according to an analysis by the Peter G. Peterson Foundation, is “a fundamental imbalance between spending and revenues” which is growing steadily worse. Federal spending is increasing as a percentage of GDP, and it is also growing faster than federal revenues. As the American population ages, entitlement programs such as Social Security and Medicare will become even costlier. Recent large expenditures, such as the several pandemic-era stimulus packages passed by the Trump and Biden administrations, and foreign aid to several ongoing global conflicts, have also undoubtedly played a role.

The national debt crisis has been brewing for a long time – quite literally, in fact, since the founding of the nation, as the United States was born with debts left over from the Revolutionary War. However, the acute phase of the debt crisis is somewhat more recent. For several decades after World War II, national debt stayed mostly stagnant at around $3 trillion (in inflation-adjusted dollars) until it began to grow precipitously in the early 1980s. Except for a brief period in the late 1990s, debt has continued to rise ever since, with significant spikes around the War on Terror in the 2000s, the financial crisis of 2008, and the COVID-19 pandemic in 2020. This rise has continued through both Democratic and Republican presidencies, as well as congressional majorities of both parties.

For comparison, if the CBO predictions come true, then we can expect to add $3 trillion to our debt – the entire amount that existed before 1980 – every eighteen months from now until 2034.

National debt as a percentage of GDP has also increased over time, although it has fluctuated slightly more than debt overall. In 2012, national debt matched American GDP for the first time. It reached a peak in 2020, at 127% of GDP, and has declined slightly since then. Debt held by the public currently sits at 99% of GDP.

Dispiriting though these numbers may seem, they are likely to only grow worse in the coming months and years. It is clear that, one way or another, America’s national debt crisis will not be solved without implementing radical systemic changes, of precisely the kind that few politicians would be willing to make because they would be politically unpalatable to the majority of American voters.