The US national debt has crossed the mark of $32 trillion

US national debt exceeds $32 trillion informs The New York Times, citing a United States Department of the Treasury report.

The newspaper writes that the excess of this volume came nine years earlier than expected in the pre-pandemic period – the fight against Covid-19 required emergency spending “along with sluggish economic growth.” Despite the fact that the decision to raise the debt ceiling will reduce federal spending by $1.5 trillion over 10 years, it is projected to exceed $50 trillion by 2030, writes the NYT.

Mark Zandi, chief economist at Moody’s Analytics, told the newspaper that the cuts proposed by lawmakers do not cover social protection programs, and despite the prevention of default, “the country’s terrible long-term financial problems remain.” The Peterson Foundation (established by former U.S. Commerce Secretary Peter J. Peterson) also expressed concern over projections that the U.S. national debt will rise by $127 trillion over the next 30 years and that by 2053 interest spending will account for nearly 40 percent of all federal revenue.

On May 7, US Treasury Secretary Janet Yellen warned that the United States could face a default in early June if the country does not pass a bill to raise the national debt ceiling. Later, on May 27, Yellen said in a letter to Congress that the Treasury Department may not be able to service obligations in full if Congress does not expand borrowing limits by June 5.

On May 28, Speaker of the US House of Representatives Republican Kevin McCarthy announced that he had reached an agreement in principle with the White House to prevent a sovereign default. The text of the agreement was published on 29 May.

On June 3, Bloomberg, citing a statement from the White House, reported that US President Joe Biden signed a law to raise the national debt ceiling. According to the document, the government will be obliged to comply with the new restrictions on budget spending, subject to the actual abolition of the mechanism. It is established that the operation of the paragraph of the US Code on the establishment of the ceiling will be suspended until January 1, 2025, but after the end of the freeze period, from January 2, 2025, the ceiling can be increased in accordance with the current need, follows from the Biden and McCarthy agreement.