Gross National Debt Reaches $39 Trillion

The gross national debt of the United States reached $39 trillion yesterday, according to the U.S. Treasury. The gross debt reached its previous milestone of $38 trillion in October of last year. Meanwhile, debt held by the public – the measure of debt preferred by economists – stands at over $31 trillion.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

Surpassing $39 trillion in gross debt is an embarrassing milestone that both parties have helped build over decades, and neither seems particularly interested in addressing it before we hit $40 trillion.

No matter what metric one chooses to examine our fiscal trajectory, we are clearly headed in the wrong direction. Gross debt is now $39 trillion; debt held by the public recently surpassed $31 trillion for the first time; deficits are approaching $2 trillion; and deficits as a share of the economy are twice as large as the 3% goal many economists and bipartisan policymakers believe we ought to be targeting.

Markets are paying close attention to our fiscal situation, and every time we hit a new milestone, we risk spooking them.  

Choosing to abandon our fiscal responsibilities like this does not exist in a vacuum; in fact, it wreaks havoc on our economy and everyday life. Higher debt exacerbates inflationary pressures, squeezes out investment in our economy, allows interest costs to dominate our defense spending, leaves us vulnerable to emergencies and geopolitical turmoil, and could even provoke a fiscal crisis.

Rather than ignoring these milestones as both parties have largely done, policymakers should acknowledge them for what they are and begin pivoting toward a more stable course. That means committing to No New Borrowing, establishing a fiscal goal for the nation like 3% deficits to GDP, adopting a Super PAYGO rule to require any new costs to be paid for twice over,  beginning to address the long-term solvency of our imperiled trust funds, and putting in place a fiscal commission to develop a bipartisan debt deal.  

And finally, we should adopt a Break Glass plan in case we have an emergency before our lawmakers put the needed changes in place.  

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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.