Business & Economy

US public debt exceeds $30 trillion for first time

Washington, Feb 1 (EFE).- The United States public debt exceeded $ 30 trillion for the first time in history, according to Treasury Department data published Tuesday, after an increase of $ 7 trillion in the last two years, coinciding with the Covid-19 pandemic.

Since the pandemic was declared in March 2020, the US government, first with Republican Donald Trump at the helm and then with Democrat Joe Biden, promoted gigantic stimulus plans to prevent a collapse of the economy that triggered the federal debt.

Among other things, the government sent several checks worth thousands of dollars to every American taxpayer, substantially increased unemployment benefits and gave direct aid to businesses.

Of the $ 30 trillion of public debt, $ 23.5 trillion belong to creditors ($ 8 trillion to foreign investors headed by Japan and China) and the remaining $ 6.5 trillion is debt contracted by the government with itself.

Biden signed a law Dec. 16 suspending the public debt ceiling and preventing the country from incurring a payments suspension on its national debt for the first time in history.

The law increased funds by $ 2.5 trillion to deal with debts already contracted, which will allow the US to maintain its borrowing capacity until 2023.

The United States has never had to declare a default on its national debt, but it came very close in 2011, when the mere possibility of that happening sparked chaos in financial markets and prompted Standard & Poor’s to downgrade the country’s credit rating.

From time to time, the US faces default on the national debt, because unlike other countries, the American government can only issue debt up to the limit established by congress, which has the power to raise the ceiling as it sees fit. EFE


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