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US National Debt Hits $35 Trillion MilestoneIn a historic fiscal milestone for the federal government, the national debt rose to $35 trillion for the first time, according to the latest Treasury Department data. Current debt levels are equal to $105,000 per person and $266,000 per U.S. household. Washington accumulated $1 trillion in debt in less than seven months. Over the past year, the national debt has spiked by nearly $2.35 trillion, an average of about $6.4 billion per day. The immense growth of red ink flooding the nation’s capital has captured the attention of public policymakers. Federal Reserve Chair Jerome Powell in February conceded that the federal government is “on an unsustainable fiscal path.” Two of the big three credit agencies downgraded their outlook on the U.S. debt, citing fiscal deterioration, persistent debt ceiling negotiations, and ballooning interest payments. When these updates were released last year, the White House disagreed with the firms’ outlooks.

Latest news: U.S. national debt has reached $35 trillion as of July 2024. It rises by $1 trillion in 2024 alone, bringing the current debt-to-GDP ratio to 96% and expected to surpass 140% by 2032, according to the International Monetary Fund (IMF). For those unfamiliar with the term, the debt-to-GDP ratio compares a country’s total debt to its GDP (Gross Domestic Product). Think of it like a one’s debt is compared with their annual income. A high ratio means that the country owes more each year than it produces. So, what could happen to the US dollar and economic future? If debt continues to rise, it could weaken the dollar, make imports more expensive, and potentially increase inflation. It could also mean higher taxes or reduced future government spending on public needs like schools, healthcare and infrastructure.

U.S. government debt hit $35 trillion at the end of July, the latest milestone since quarterly interest payments reached $1 trillion earlier this year. As Head of Fixed Income Christopher Gunster, CFA, discusses in his latest Forbes.com article, “an increasing amount of debt could lead to higher interest rates and higher inflation, if not addressed.” From a surging federal debt-to-GDP ratio and rising interest payments, to declining foreign demand for U.S. debt, Chris breaks down why this historic figure has investors watching long-term rates. Read the article for a full analysis:

The Congressional Budget Office estimates that the total amount of gross federal debt will reach $52 trillion by 2033, a 48.5% increase from today’s level. The continued growth in the budget deficit and subsequent increase in the amount of federal debt has major implications for investors, if the recent volatility hasn’t added enough fuel to the fire. Read my latest Forbes.com column below for the full picture.

My next project is on Global Debt and these are my Key Observations based on my dashboard: Debt Trends by Sector Over Time: 1950-1970: Central Government had the highest debt, while Financial Institutions and Households reported significantly lower debt. 1971-1990: A similar trend continued with rising Central Government debt, followed closely by Private Sector debt. 1991-2010: Both Central Government and Financial Institutions showed sustained high debt levels, while Households saw moderate debt. 2011-2022: Debt levels across all sectors (Central Government, Financial, Private, and Households) remained high, indicating global financial stress. Comparative Debt Analysis (Bar Chart on the Right): Central Government Debt: Substantial increases observed over the periods 1952-1970, 1971-1990, and 2011-2022. Non-Financial Sector: Moderate to high growth. Private Sector: Consistent contributions, though smaller compared to the Central Government. In Conclusion, Central Government debt remains the dominant contributor globally across all timeframes. Recent decades (2011-2022) have shown consistent debt growth across all sectors, emphasizing increasing financial strain.

U.S. Interest Payments on National Debt Top $1 Trillion as Deficit Nears $2 Trillion For the first time, the U.S. government has spent over $1 trillion on interest payments for its $35.3 trillion national debt in 2024, reflecting a 30% increase compared to last year. This surge in costs is largely due to the Federal Reserve maintaining the highest interest rates in 23 years. Key Points: – Rising Debt Costs: Interest payments reached $1.049 trillion so far, with a projected total of $1.158 trillion by year’s end. – Soaring Deficit: The U.S. budget deficit surged by $380 billion in August alone, bringing the year-to-date total to $1.9 trillion, a 24% increase from 2023. – Fiscal Strain: Net interest payments of $843 billion now exceed all federal spending categories except Social Security and Medicare. With the Fed likely to lower rates slightly next week, U.S. borrowing costs remain a key economic concern as the deficit grows. 🔗 Full article here: https://lnkd.in/gTrp9WsU #NationalDebt #USDeficit #InterestRates #FederalBudget #TreasuryYields #Economy #DebtCrisis #FiscalPolicy

☄️ The US National Debt Exceeded $35 Trillion For The First Time In History 🏆The US national debt has updated its record. In January 2024, the debt volume exceeded $34 trillion for the first time. Last June, US President Joe Biden suspended the debt limit until January 2025. 🔴The House of Representatives committee report said that the current US national debt corresponds to $104 thousand per person, $266 thousand per household or $483 thousand per child. The material also indicates that since US President Joe Biden took office in 2021, the national debt has increased by $7.25 trillion. 💰The Congressional Budget Office projects that by 2034, the United States' national debt will increase to $50.7 trillion, or 122% of the country's GDP. According to the IMF, if current approaches to fiscal policy are maintained, the US public debt will double by 2053. 😓 The US spends more to finance its national debt due to higher interest rates. Net interest payments on debt are expected to be 3.2% of GDP in 2024, the highest since 1991, according to Bloomberg. 🗣IMF called the growth of US government debt a threat to the global and American economy, so there is a need to stop the continuing increase in the ratio of government debt to GDP.

🌍 The global debt bomb of $100 trillion continues to tick, warns the IMF. • Global Public Debt: It is expected that the level of public debt worldwide will exceed $100 trillion by the end of the year and approach 100% of GDP by 2030. • Causes of Growth: The primary drivers of this growth are China and the United States, highlighting the need for debt reduction measures. Remarks from the IMF Director Kristalina Georgieva, Managing Director of the IMF, emphasized in her speech that rising debt is becoming a burden for the global economy: “Our forecasts indicate a relentless combination of low growth and high debt — a challenging future. Governments need to work on reducing debt and rebuilding buffers for the next shock — which is bound to happen, possibly even sooner than we expect.” Discussion at the IMF Meeting • The meeting will take place two weeks before potentially historic elections in the U.S., while the recent inflation crisis is still unresolved. • On Wednesday, the IMF’s Fiscal Monitor will focus on the fact that public debt is projected to reach $100 trillion, with an emphasis on China and the U.S. Some finance ministers may receive additional reminders by the end of the week: • UK Finance Minister Rachel Reeves has already faced an IMF warning about the risk of market reactions if the debt is not stabilized. • Tuesday is the last day for publishing public finance data before the budget on October 30. Trends in the UK The UK tax authority is implementing stricter measures to recover debts, aiming to secure an additional £5 billion ($6.5 billion). Attention to France Meanwhile, Moody’s has scheduled a potential report on France for Friday, which is currently under close scrutiny from investors. Markets will be watching for any changes in the forecast.

Charted: Here’s Who Owns U.S. Debt U.S. gross debt increased from $34.4 trillion at the end of 2023 to $36.1 trillion as of December 2024, with some experts calling it unsustainable. In this graphic we bring a breakdown of U.S. debt composition, categorized by domestic and foreign investors as well as intragovernmental holdings. The data is sourced from the U.S. Department of the Treasury by the Peter G. Peterson Foundation, as of year-end for 2023. Key Data on U.S. Debt The U.S. national debt increases when the federal government spends more than it collects through taxes and other revenue streams. When government spending exceeds tax revenue, a #budget deficit occurs. To cover the shortfall, the U.S. Treasury issues Treasury bills, notes, and bonds. The national debt is the cumulative total of the federal government’s budget deficits, adjusted for any surpluses. Of the $34.4 trillion in gross debt in 2023, $27.3 trillion (79%) was public debt borrowed from domestic and foreign investors, while $7.0 trillion (21%) was intragovernmental debt, reflecting internal government transactions. The Federal Reserve System was the largest domestic holder of U.S. public debt, with holdings of $5.24 trillion. Debt held by the public represents the amount borrowed by the U.S. Treasury from external lenders via financial markets to fund government operations. It is considered a critical measure of debt because it directly impacts the government’s ability to manage economic crises and can influence economic stability. As of December 2023, debt held by the public equaled 97% of the U.S. GDP. Debt Under Trump With the upcoming administration change in January, President-elect Donald #Trump has appointed billionaire #ElonMusk and former presidential candidate Vivek Ramaswamy to head the newly established Department of Government Efficiency (DOGE). The department aims to identify and eliminate wasteful spending, with Musk claiming it could cut $2 trillion in government “waste,” potentially reducing the national debt or curbing expenditures… #economy #investing #markets

IMF Report Sounds Alarm on Soaring Global Debt Levels By Nyembe Chapeshamano | Business News | April 17, 2024 The latest warning bells from the International Monetary Fund (IMF) paint a stark picture of the world's financial future, with government borrowing spiraling to alarming heights. In its biannual report on government borrowing, the IMF projects a troubling trajectory, highlighting the potential ramifications for both economic stability and global markets. Forecasts indicate a staggering increase in government debt relative to economic output, with the United States and China bearing the brunt of the burden. By 2053, U.S. government debt is projected to surge by 70%, while Chinese debt is expected to more than double. Such exponential growth in debt levels raises red flags, as the IMF underscores the profound impact this surge could have on the global economy. Moreover, the IMF predicts a sharp rise in global government debt, reaching 98.8% of GDP by 2029. This worrying trend reflects a broader pattern of unsustainable borrowing practices across the globe, posing significant challenges for policymakers and economists alike. The report also singles out Italy and the UK, emphasizing the critical need for these nations to address their mounting debt problems. Failure to do so could exacerbate existing vulnerabilities within their economies and amplify the risk of financial instability. Compounding these concerns is the looming specter of global elections, set to exacerbate budget deficits as governments ramp up spending to appease voters. This anticipated surge in spending threatens to further strain already stretched fiscal resources, exacerbating the debt burden on future generations. However, amidst the gloom and uncertainty, there may be a glimmer of hope for investors seeking refuge from the storm. Traditionally, in times of economic turmoil, gold has emerged as a safe haven asset, prized for its stability and intrinsic value. The IMF's warnings could prompt a surge in demand for gold as investors seek to hedge against the risks posed by escalating debt levels. In conclusion, the IMF's latest report serves as a sobering reminder of the perils of unchecked government borrowing. As debt levels soar to unprecedented heights, the global economy teeters on the brink of instability. Urgent action is needed to address these mounting challenges and chart a course towards sustainable fiscal practices, lest we risk a future marred by financial turmoil and economic hardship.