President Donald Trump was no better. His administration increased our debt by almost $8 trillion.
This will not end well.
Last year, we hit a new ugly milestone: Americans must pay $1 trillion per year just for interest on our debt.
That’s more than we spend on defense — on infrastructure, education, poverty programs … everything, but Social Security and Medicare.
If we didn’t waste these trillion dollars on interest, we could give $3,000 tax cuts to every man, woman and child to use as they please.
Worse, America’s spending growth is unsustainable. You can stretch a rubber band farther and farther, but eventually, it will break.
This column has reported on the politicians’ irresponsibility for a long time.
In 2019, I complained that our debt increased by a trillion dollars every year. But now, it’s three trillion!
In 2023, the ratings agency Fitch was criticized for downgrading U.S. government debt. But a few months later, Moody’s Investor Service lowered its outlook from “stable” to “negative,” saying America’s “fiscal deficits will remain very large, significantly weakening debt affordability.”
No one knows which straw will break the camel’s back.
In the past, politicians at least talked about our debt problem.
President Bill Clinton said, “We’ve got to deal with this big long-term debt problem, or it will deal with us.”
By the end of FY 2023, total federal debt was $33.1 trillion. 79% was debt owed to investors (debt held by the public) and 21% was debt the government owed itself (what Treasury owes to other parts of the government).
First, the debt held by the public stands at more than $24.64 trillion. This represents debt securities, like Treasury bonds and notes, bought by banks, insurance companies, state and local governments, foreign governments and private investors.
The remaining debt, which totals about $6.83 trillion, can be classified as intragovernmental holdings. This is basically debt the government owes itself. “For example, some federal trust funds invest in Treasury securities, thereby lending money to [the] Treasury,” according to the U.S. Government Accountability Office. The Social Security Administration, the Department of Defense and the United States Postal Service all have investment holdings in federal debt.