U.S. Debt Hits $16 Trillion
Romina Boccia /
Today, the U.S. debt clock hit $16 trillion. Compare that to the end of 2008, just days before President Obama officially took office, when the total federal debt was short of $10 trillion. That’s a 60 percent increase in the federal debt in less than 4 years! Now more than ever, Congress should get to work to rein in out-of-control spending and debt. The economic health of the American nation is at stake.
Each American’s share of the federal debt rises to $37,437. That represents nearly three-quarters of the income of the average American household earning $50,964 in 2012. And these levels are projected to grow even further, to the point where each American’s share of the federal debt will surpass the staggering $100,000 mark in less than 20 years. Current and future generations of taxpayers are on the hook for increasing levels of debt as Washington continues on its spending spree.
The nation will soon surpass the next major debt threshold. When the federal debt reaches $16.394, the U.S. will once again reach its statutory debt limit—which Congress will need to address. The “Budget Control” Act (BCA), a result of the contentious 2011 debt ceiling debate, increased the debt limit by $2.1 trillion in three installments:
- Immediately after passage of the bill, the debt limit increased by $400 billion from $14.294.
- The second increase of $500 billion came in September for a total limit of $15.194 trillion.
- The latest and biggest installment to the current limit came in January, increasing the debt limit by $1.2 trillion.
However, the act failed to actually control the budget, which is only possible by reining in the key driver of spending and debt: entitlement spending. Thus, government spending and debt keeps rising, pushing up against the debt limit again, and soon. By some estimates, the U.S. may hit the debt ceiling as soon as November.
According to the latest Congressional Budget Office (CBO) report, the budget deficit is projected to cross the $1 trillion mark this year for the fourth straight time. As Heritage budget fellow, Patrick Louis Knudsen, explains, the future outlook is just as dire:
Beyond the immediate, the outlook remains threatening. Assuming current policies, CBO projects that spending will continue its record-setting climb, reaching $6 trillion—or 24.1 percent of GDP—by 2022. That spending—driven mainly by the three major entitlements: Medicare, Medicaid, and Social Security—will outpace tax revenue, resulting in deficits that never fall below $800 billion throughout the decade.
Congress should rein in these out-of-control spending levels before the federal debt reaches economically damaging levels. Countries like Greece and Italy demonstrate the economic pains that result from procrastinating on solving a nation’s major spending and debt challenges. Only Congress can decide whether to make the prudent and intentional decisions to ward off a fiscal crisis, or whether to stand idle until forced to act by unnecessarily painful events that could have been avoided.