As of the end of September, the U.S. national debt reached $33.5 trillion, with an increase of over $500 billion in just 20 days, according to the Treasury Department.
The debt ceiling was officially set at $31.4 trillion, but it was surpassed in January 2023.
The U.S. economy’s output is estimated at $25.46 trillion, emphasizing the challenge of paying off the national debt, which would require a significant growth rate.
In June 2023, President Joe Biden signed a bipartisan debt bill, extending the debt limit until January 2025.
This legislation aimed to prevent potential economic collapse by avoiding default on government obligations; reaching an agreement to raise the debt limit involved intense debates and discussions between Republicans and Democrats, with concerns about the impact on spending priorities.
A failure to raise the debt limit could lead to the government’s inability to raise funds or meet financial obligations, causing substantial financial disruptions globally, impacting prices, and affecting mortgage rates.
The continuous increase in the national debt remains a significant economic challenge that policymakers must address to ensure financial stability and sustainability.