America’s gross national debt surpassed $33 trillion for the first time in U.S. history on Monday as Washington, D.C., faces a potential government shutdown over federal spending.
Data reportedly published by the Treasury Department showed the national debt — which measures how much the federal government owes security holders — hit $33.04 trillion, just months after it eclipsed $32 trillion in mid-June.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a news release that the latest numbers reached “a new milestone that no one will be proud of.”
“Debt held by the public, meanwhile, recently surpassed $26 trillion,” MacGuineas said. “We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous.”
The Congressional Budget Office confirmed last week that the underlying deficit would likely double from last fiscal year to this one, according to MacGuineas. The office reportedly warned in June that high interest rates and rising national debt could make net interest payments spike to 6.7% of GDP by 2053, according to Fortune.
“Instead of hearing about solutions, we hear promises of which programs our leaders are unwilling to touch and which taxes they are unwilling to raise,” she said. “That kind of talk is not only pandering, but it’s also downright irresponsible when we have a mess like this on our hands.”
The announcement comes as House Republicans proposed a short-term plan on Sunday that would temporarily fund the government through October 31 to avoid a shutdown and impose an 8% spending cut on federal agencies, excluding defense funding, veterans affairs, and disaster relief, according to Fox Business.
But the measure received opposition from fellow GOP lawmakers while Democrats are unlikely to support it.
Michael A. Peterson, the chief executive of the budget watchdog group Peter G. Peterson Foundation, raised the alarm of a looming federal crisis.
“As we have seen with recent growth in inflation and interest rates, the cost of debt can mount suddenly and rapidly,” Peterson said, according to The New York Times. “With more than $10 trillion of interest costs over the next decade, this compounding fiscal cycle will only continue to do damage to our kids and grandkids.”
Mark Spitznagel, founder of the hedge fund Universa Investments, told Fortune in August that we’re living through the “greatest credit bubble in human history” after warning of a potential impact from the debt increase.
“We’ve never seen anything like this level of total debt and leverage in the system,” Spitznagel said. “It’s an experiment. But we know that credit bubbles have to pop. We don’t know when, but we know they have to.”
U.S. Treasury Secretary Janet Yellen told CNBC on Monday that she isn’t worried about the staggering debt, claiming that the net interest as a share of GDP remains under control by the federal government.
“And even with the rise we have seen in interest rates, that remains at a very reasonable level,” Yellen said, admitting that U.S. officials need to be careful about spending going forward in order to stay on this “sustainable course.”
“Certainly, greater deficit reduction is possible,” she added. “The President has proposed a series of measures that would reduce our deficits over time while investing in the economy, and this is something we need to do going forward.”
President Joe Biden signed the Fiscal Responsibility Act in June that will suspend the debt limit until January 2025 and implement restraints on spending that the Congressional Budget Office estimated would reduce budget deficits by $1.5 trillion over the next decade.