US Debt Projected To Exceed $50 Trillion By 2033: 'More Than Combined GDPs Of China, Japan, Germany And India'

The United States is on a fiscal trajectory that could see its government debt exceed $50 trillion within the next decade, according to a recent analysis.

As per a Business Insider report, Bank of America released a note on Tuesday revealing daunting projections for the U.S. debt based on data from the Congressional Budget Office. The U.S. currently holds a massive $33.6 trillion in public debt, which is expected to skyrocket by another $20 trillion to $54 trillion by 2033.

The forecasted increase is attributed to what Michael Hartnett, a Bank of America investment strategist, describes as “fiscal excess in the 2020s.”

“US public debt is… more than the combined GDPs of China, Japan, Germany, and India,” he added.

He went on to quantify the increase as an addition of $5.2 billion every day, or $218 million per hour, over the coming decade. This debt surge aligns with a significant rise in the federal deficit, which inflated by $320 billion to reach $1.7 trillion in 2023 alone.

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The Treasury Department has consequently been compelled to auction an unprecedented amount of bonds. Moreover, rising bond yields have led to increased annual interest costs, which exceeded $1 trillion in October, further exacerbating deficits.

Bank of America warns that continuous borrowing by U.S. policymakers may lead to persistent investor concerns over inflation, bond defaults, and currency debasement. Hartnett suggests that central banks might resort to policies such as quantitative easing and introducing yield curve control, which could negatively impact the U.S. dollar.

Another measure of debt, “debt held by the public,” while less than the overall public debt, is equally concerning. It stood at $26.3 trillion or 98% of projected GDP at the end of fiscal 2023. The CBO anticipates this will increase to 115% of GDP by 2033. Despite these figures, borrowing is an ongoing mechanism for economic growth, an integral part of the money circulation process, and unlikely to cease.

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