US debt has crossed the psychological limit

The United States' national debt exceeded the record level of $34 trillion on Friday, according to data published on the website of the US Treasury Department. On Thursday, the debt level reached 33 thousand and 900 billion dollars, and three months ago it was 33 trillion dollars.

The $34 trillion deficit arose much earlier than expected. The January 2020 forecast by the Congressional Budget Office, the nonpartisan Congressional Budget Office, projected a deficit of $34 trillion for fiscal year 2029, which begins in October. However, the debt grew faster than expected due to the Covid epidemic that broke out in 2020, which led to the US economy significantly slowing down and even stopping for a period. The government borrowed heavily under former President Donald Trump and current President Joe Biden to stabilize the economy and support the recovery. However, the recovery was accompanied by a sharp rise in inflation, which raised interest rates and made servicing the government's debt more expensive.

According to official data, the most important foreign buyers of US debt, such as China, Japan, South Korea and European countries, are reducing their holdings of US government securities. According to an analysis by the Peterson Foundation, the foreign share of US debt peaked at 49% in 2011, then fell to 30% by the end of 2022.

(MTI)