America’s national debt has climbed north of $31 trillion for the first time, a milestone reached at a time of historically high inflation, rising interest rates and growing economic uncertainty.
The nation’s total public debt closed at $31.1 trillion on Monday, according to Treasury Department data released on Tuesday.
The US government made a loan to help boost the nation’s economy during the Covid-19 pandemic. The deadly virus threatened lives, labor markets and supply chains. The debt has risen by nearly $8 trillion since the start of 2020. It was up $1 trillion in eight months.
The borrowing that happened during the Trump administration and the beginning of the Biden administration came at a time when interest rates were low. Now, at a time of historically high inflation and the Federal Reserve raising interest rates sharply in the fight against rising prices, borrowing costs are much higher.
The Committee for a Responsible Fiscal Budget estimated last month that President Joe Biden’s policies could add $4.8 trillion to the deficit between 2021 and 2031.
“Excessive borrowing will lead to continued inflationary pressures, push the national debt to a new record in 2030 and triple federal interest payments over the next decade, or even sooner if interest rates rise faster or more than expected,” the CRFB. he wrote
America’s debt levels have risen over the past decade. The outstanding public debt was $10.6 trillion when former President Barack Obama took office on January 20, 2009; $19.9 trillion when former President Donald Trump took office on January 20, 2017; and $27.8 billion when Biden takes office on Jan. 20, 2021, Treasury Department data show.
Passing another debt milestone could certainly indicate “very big trouble” in the future; however, in the short term, high inflation levels are the biggest concern, said Alex Pelle, US economist at Mizuho Securities.
“Any debt problem is really a potential problem — I wouldn’t even say a particular problem — but a potential problem five to 10 years out,” he said. “One of the advantages of being the world’s reserve currency is that everyone wants to buy your debt cheap.”
CNN’s Zachary B. Wolfe contributed to this report.