Just seven months ago, the U.S. national debt had surpassed $34 trillion. Three months earlier, the country had reached a milestone of surpassing $33 trillion.
The total public debt of the government of USA exceeded $35 trillion for the first time, according to data released Monday by the Treasury Department. By the end of December 2023, the country’s national debt will exceed $35 trillion.had surpassed US$34 trillion. Three months earlier, the country had reached a milestone by surpassing US$33 trillion.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, commented that “borrowing continues at a reckless and inflexible pace.”
He added that despite the risks and warnings, these warning signals seem to be going unheeded. MacGuineas warned that a serious stance on debt is needed immediately, stressing that election years should not be an excuse to ignore foreseeable dangers, debt being one of the most important.
Debt: what the market is analyzing
The Peter G. Peterson Foundation, a nonpartisan organization dedicated to addressing long-term fiscal challenges, noted that the $35.001 trillion national debt translates into a debt of $103,945 per person in the United States. The foundation attributes the deficits primarily to predictable structural factors: the aging of the baby boomer generationrising health care costs and a tax system that doesn’t raise enough money to fulfill government promises.
Desmond Lachman, a researcher at the American Enterprise Institute and former International Monetary Fund official, previously told Xinhua that the U.S. budget deficit is on an unsustainable path.ble. Lachman warned that this “dangerous trajectory” poses serious risks for the dollar and the long-term inflation outlook.
Debt plans
As pointed out this Tuesday from InviuThe U.S. Treasury lowered its federal borrowing estimate for the current quarter and projected that the government’s cash cushion will shrink toward the end of the year, just ahead of a possible new fight over the debt limit.
It now estimates net borrowing at $740 billion for the July-September period, down from its previous forecast of $847 billion on April 29, a reduction expected by the market. And in a forecast that traders will be watching closely because it has potential implications for any future debt limit battles.the Treasury estimated a cash balance of US$700,000 MM by the end of the yearThat reserve would shrink after the debt limit is reinstated by law early next year, unless Congress approves an increase or a new suspension.
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As for this quarter, the Federal Reserve’s decision to begin slowing the liquidation of its Treasury bond holdings eased the government’s need to sell more debt to the public. The report comes ahead of tomorrow’s so-called quarterly refinancing announcement when the Treasury will unveil its plans for issuing long-term debt.
The brokerage firm in the city maintains that traders generally expect debt managers to keep sales stable for the second consecutive quarter. “This good news helped reduce Treasury yields yesterday, while concerns about a large Treasury fiscal deficit persist,” Inviu concludes.
Source: Ambito
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