The US national debt has reached $25 trillion, with adding $7 trillion in the last five years. The national debt has increased by over 10% in the 2019-20 fiscal year alone.
May 7, 2020 | AtoZ Markets – Since the start of the 2019/2020 fiscal year (beginning October 1, 2019), the US national debt has ballooned by more than 10% alone, climbing from $22.7 billion to its current value of $25 trillion, or $25,057,924,023,406.80 to be precise.
$25,057,924,023,406.80 (+) #NationalDebt— National Debt Tweets (@NationalDebt) May 6, 2020
US national debt shows no sign of slowing down
According to data from the US Treasury, the US national debt continues to grow at a pace of ~$1.2 million per minute, adding more than $1.7 billion per day. These record numbers are the result of a huge uptick in government spending, in an attempt to suppress the ongoing coronavirus pandemic. The move was also to keep the US economy running during these uncertain times.
This has sent the debt to GDP ratio skyrocketing in recent years. The US national debt to gross domestic product (GDP) ratio has been skyrocketing in the last few years. The US debt to GDP ratio now stands at 117%. This number just shy of the 118.9% record set just a year after World War II ended. In the last five years, the debt ceiling has been increased four times. The debt ceiling in the defined maximum amount of debt that the government can carry. The debt ceiling has increased four times in the last half a decade and may need to be increased again soon.
The majority of US debt is owned by Americans, institutional investors, banks, and the federal reserve. However, almost 30% is owned by foreign entities. The entities include China and Japan, which hold more than $1 trillion in US debt each. This intergovernmental debt is set to greatly increase in the second quarter of 2020, as the US treasury prepares to borrow a further $3 trillion to fund the government’s continued response to the pandemic.
More fiscal stimulus to shield the US economy
Jerome Powell, chairman of the Federal Reserve, recently pointed out that there needs to more economic stimulus.
“Economic activity will likely drop at an unprecedented rate in the second quarter,” Powell told a video press conference earlier this month, according to Bloomberg. “It may well be the case that the economy will need more support from all of us, if the recovery is to be a robust one.”
Despite the harrowing economic circumstances, US President Donald Trump recently announced that he would address the mounting national debt if he is re-elected in November. In his 2016 Republican party campaign, he also pledged to completely wipe the debt in eight years. Following his election as the United States president, US national debt has increased by $5 trillion.
If successful, he would be the second president in history to successfully clear all national debt. The first was Andrew Jackson, the seventh president of the United States, who accomplished this in 1835. But he would need to find an extra $25 trillion—and counting.
Should politicians worry about the US national debt now? Share your thoughts in the comments below.