The alarming rise in the U.S. debt has been a hot topic of discussion recently and the rapid pace in which the country is saddling debt has shocked none other than Tesla CEO Elon Musk.
What Happened: The U.S. debt surpassed $33 trillion for the first time recently and 48 hours after the level was hit, the debt increased by $47 billion, said conservative financial blog Zero Hedge in a post on X, formerly Twitter.
“That’s $1 billion in new debt every hour,” it said in the post.
Musk responded to the data with the expression “Yikes.”
Why It’s Important: The U.S. grappled with a potential debt default earlier this year and after a lot of bickering, lawmakers agreed to raise the debt ceiling. The crisis that was raging since January ended with President Joe Biden signing the Fiscal Responsibility Act of 2023 into law. The law suspended the debt ceiling till Jan. 1, 2025.
Since the debt deal, the U.S. paid nearly $3 billion per day of interest expense and the debt service cost hit its highest level since 2009, said Kobeissi newsletter, a provider of insights into global capital markets, in a post on X. The U.S. deficit has jumped by over $300 billion.
At the same time, federal tax receipts were now down 8.4% on a 12-month basis, it noted. While noting that trillions of dollars of debt are being issued at 5%+ interest rates, nearly double the recent low, Kobeissi said Interest expense will soon be the biggest expenditure.
The surge in debt comes at a time when the government is facing the prospect of a shutdown by Oct. 1 if a funding deal is not agreed upon among Congressmen before the midnight Sept. 30 deadline.
Read Next: Mounting Interest Charges Set To Leave US ‘Drowning In Debt’ For 30 Years, Says Analyst
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