The pandemic has brought nothing but misery to the whole world. The importance of life and health came to the fore as millions of people battled the deadly coronavirus. Moreover, people all over the world witnessed a financial crisis, and bankruptcy filings were proof of the same. The increased spending during the pandemic continues to hit several economies and now reflects the US government debt.
American economic history took a new turn and the US government debt hit a record $31.4 trillion for the very first time. It should be noted that this was on top of high inflation and rising interest rates.
according to recent reportsAbout $5.6 billion will be added to the U.S. government debt every day by the year 2022. This is considered quite high and terrifying in the long run.
It should be noted that on January 1, 2022, US debt was $29.48 trillion.
The tumultuous US economy
The alleged Inflation Reduction Act, which aims to curb 40 years of high price increases due to various economic factors, was recently signed by President Joe Biden, who has praised his government’s efforts to reduce the deficit this year. However, economists say the latest debt figures are a concern.
As mentioned earlier, US economic history reached several milestones this year. Certainly not in a good way. Not long ago, US inflation rose to a 40-year high, fueling the rise in interest rates further.
Speaking on the US Government Debt, Maya MacGuineas, Chair of the Responsible Federal Budget Committee said,
“This is a new record that no one should be proud of. Over the past 18 months, we’ve witnessed inflation surge to its 40-year high, interest rates rise in part to combat this inflation, and several fiscal pieces of legislation and executive action. We are addicted to debt.”
But unless President Biden’s legislation speeds it up, and more so, the debt is predicted to double almost by the middle of the century due to spending during Covid. Mainly, Biden pledged to spend trillions to reform the post-pandemic economy. However, this could mean that dealing with debt in the future will require significant political sacrifices, such as tax increases and cuts to numerous bills.