US national debt surged by more than $500 billion in just 20 days to reach $33.5 trillion, according to data provided by the Treasury Department last week.
On September 18, the Treasury reported that the amount of money borrowed by the federal government to cover operating expenses stood at $33.04 trillion. It took Washington three months to drive it from $32 trillion to the current level.
The debt ceiling, which was legally set at $31.4 trillion, was surpassed in January 2023.
The total output of the US economy was only $25.46 trillion, meaning that the economy would have to grow by 33.5% to cover the national debt.
The White House has been pressing Congress to lift the limit. On June 3, President Joe Biden signed a bipartisan debt bill that allowed the limit to be lifted until January 2025, thus averting an economically disastrous default.
The deal on raising the debt limit was fiercely debated by Republicans and Democrats for weeks. The prolonged dispute over spending priorities put the measure’s approval at risk amid fears that the Republicans, who hold a majority in the House, would refuse to support the Fiscal Responsibility Act.
A default would have limited the government’s ability to borrow or pay its bills, possibly triggering financial havoc overseas, with a massive negative impact on prices and mortgage rates in other countries.
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