Once unimaginable, the U.S. national debt has hit a new crisis level, now topping the country’s gross domestic product. As of the end of the first quarter, the nation’s debt was $31.27 trillion, higher than the gross domestic product of $31.22 trillion for the prior 12 months.
That puts the ratio of national debt-GDP at 100.2 percent. And the ratio is likely to keep climbing, given that the federal government is spending $1.33 for every dollar it receives in revenue.
Any household that ran its finances like the federal government would be bankrupt. But Washington just keeps printing money, putting the nation’s fiscal health at risk.
Virtually ignoring the crisis, Congress has continued to spend aggressively and approve tax cuts, driving the nation further into debt. As a result, interest payments on the debt are the second largest expenditure of the federal government (after Social Security), accounting for 14 percent of spending, according to the U.S. Treasury. That’s $519 billion, money that could be used far more productively. Deficit hawks warn that high interest costs can crowd out important public investments in education, research and development, and infrastructure.
Only during World War II, when the government had to aggressively finance a rapid military buildup, did the national debt exceed gross domestic product, rising to 106 percent of GDP. But with a postwar slowdown of military spending and an economic boom in the late 40s, the debt quickly declined. No such relief is in sight today.
