The U.S. debt reached a new record high and breached the $35 trillion mark, and economist Peter Schiff on Monday rued the political apathy toward this ticking timebomb.
What Happened: The U.S. national debt now stood at $35.01 trillion and has ballooned by over $7.2 trillion since President Joe Biden took office, said Schiff in a post on X, formerly Twitter. To put things in perspective and to emphasize the recent surge, the gold bull noted that it took 43 presidents, 215 years, to add the $7.2 trillion debt. Biden did it in just 3.5 years, he said.
The previous administration headed by former President Donald Trump did not do any worse, statistics shared by the economist showed. He noted that Trump added $7.8 trillion in debt during his term, a record debt pile for a single term.
“Biden is on track to break the record,” Schiff said.
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Why It’s Important: Commenting on the debt breaching the $35 trillion mark for the first time ever, House Budget Committee Chairman Jodey Arrington (R-Texas) said this equates to $104,497 per person, $266,275 per household
and $483,889 per child. He quoted former President Ronald Reagan’s statement which said, “We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.”
The Republicans and the Democrats are at loggerheads over the means to steer the economy out of the fiscal mess, with the former clamoring for spending cuts, while the latter bet more on raising additional revenue sources through taxation of the rich, among other things.
Another undesirable offshoot of the higher debt is the interest-rate burden the country is left to shoulder. Every day, the U.S. spends $2.4 billion on interest, according to the policy think tank Peter G. Peterson Foundation. “Rapidly growing interest payments are a burden that hinders our future economy,” it said.
In an update to the budget and economic outlook in mid-June, the Congressional Budget Office said the federal budget deficit in fiscal year 2024 is estimated to be $1.9 trillion, equating to 7% of the GDP. The agency expects the larger deficits to push federal debt held by the public to 122% of GDP in 2034.
The iShares U.S. Treasury Bond ETF GOVT ended Monday’s session up 0.13% at $22.84, according to Benzinga Pro data.
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