Kathmandu [Nepal], August 21 – The United States’ national debt has surpassed $40 trillion raising fresh concerns about the country’s long-term fiscal outlook as debt is projected to climb sharply over the next decade.
The Congressional Budget Office (CBO) estimates that US national debt could reach nearly $64 trillion by 2036. Economists say the rising debt burden could create growing challenges for the US economy and government finances.
US debt first crossed $1 trillion in 1981. It has since risen steadily, driven by increased government spending, lower revenues following tax cuts and heavy borrowing during major crises, including the 2008 financial crisis and the COVID-19 pandemic.
The debt stood below $20 trillion when Donald Trump began his first presidential term in 2016. It has since more than doubled to exceed $40 trillion.
According to the US Congress’ Joint Economic Committee the national debt is increasing by about $90,000 every second which is equivalent to roughly $7.8 billion a day.
The US is now approaching its $41.1 trillion debt ceiling. Economists however say the country is not facing an immediate financial crisis.
Mohamed El-Erian said the size of the US economy and the dollar’s status as the world’s leading reserve currency give Washington greater borrowing capacity than many other countries. He described the situation as a “yellow light,” rather than a “red light.”
US debt has reached about 126% of the economy’s size although the ratio remains below that of G7 members Japan and Italy.
Economists warn that rising borrowing costs could also push up interest rates and financing costs globally.
