There’s enough revenue to pay interest on the debt even if the $31.4 trillion debt ceiling is reached.
Meaning, if the U.S. defaults on the debt on June 1, it will be because President Joe Biden chose not to make principal and interest payments on U.S. Treasuries out of existing revenue, for which there is more than ample revenues to service and refinance up to the current debt ceiling limit, $31.4 trillion.
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Gross interest owed on the $31.4 trillion national debt — that is, interest owed on both the $24.9 trillion publicly traded debt and the $6.7 trillion debt in the Social Security, Medicare and other trust funds — will reach a gargantuan $1 trillion in 2024 for the first time in American history, according to the latest data gathered by the White House Office of Management and budget.
To put that into perspective, that is more than is spent on national defense related spending, currently $814 billion.
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While the constitutionality of President Joe Biden’s student loan bailout is awaiting a Supreme Court decision, a bill re-introduced by two House members would block the Biden administration from canceling student loan debt on a mass scale.
The Student Loan Accountability Act, authored by U.S. Representatives Mike Gallagher (R-WI-08) and Drew Ferguson (R-GA-03) would also prevent forgiven loans from getting an additional tax break and it would bar the Internal Revenue Service from sharing American’s tax information for the purpose of implementing mass loan cancelation.
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Household debt across the country is sharply on the rise, with U.S. households now collectively on the hook for about $17 trillion in total. The average family holds about $142,680 in debt, according to a new WalletHub report.
All told, the personal finance website concludes that 2022 ended with Americans roughly $320 billion more in total debt than they were at the start of the year. During the fourth quarter alone, consumers added at least $398 million in new debt, the fourth highest build-up for a fourth quarter over the past two decades and more than four times larger than Q4 2021.
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When Joe Biden delivers the State of the Union Address on Tuesday night, at least three things seem pretty certain. He’ll suggest America is now in its Golden Age, no doubt begun sometime in late January 2021. He’ll offer a laundry list of new things on which he’d like to have the government spend Americans’ hard-earned money. And he won’t say a thing about how we’re now $31.4 trillion in debt—roughly triple the $10.6 trillion tally from when Biden became vice president just 14 years ago.
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The fiscal hawks are sticking to their guns. On Friday, Sens. Ron Johnson (R-WI) and J.D. Vance (R-OH) joined 22 of their fellow Republican senators in a letter warning President Joe Biden that they will not vote for increasing the debt ceiling without structural reforms to the federal government’s budget and debt problems.
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House Speaker Nancy Pelosi officially stepped away from leadership last week after two decades directing the political agenda of House Democrats.
There’s no denying the historic nature of the California lawmaker’s tenure, whose leadership began in 2002 when she became the first woman elected House minority whip. She’d go on to take up the gavel of House speaker twice (from 2007–2011 and 2019–2023), making her the only female House speaker in history and one of a few to serve nonconsecutive terms.
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The gridlock that paralyzed House Republicans over the past week in their quest to elect a new Speaker could be a foretaste of more to come, with party moderates and conservatives set to tangle in the months to come over raising the debt ceiling and reining in reckless government spending.
Although newly elected Speaker of the House Kevin McCarthy ultimately prevailed in his bid for the office over a small but determined band of House Freedom Caucus members, his slim GOP majority in the House will be vulnerable if and when conservatives rebel again down the road, as some are predicting, in an effort to reassert debt reduction as a top priority for the party.
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The dust has barely settled from the contentious midterms, and the battle lines are already being drawn for the next legislative fight in Washington: the debt ceiling. With the nation at unprecedented levels of indebtedness, the choice in this fight is a stark one: a path toward stability or fiscal Armageddon.
If that sounds hyperbolic, consider the following facts about America’s finances.
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President Joe Biden’s student loan forgiveness plan will be costly for American taxpayers, a coalition of GOP governors said in a letter sent Monday to the White House.
The letter, signed by 22 GOP governors, tells Biden to “withdraw” the plan, citing cost estimates of up to $600 billion, or $2,000 per American taxpayer.
“As governors, we support making higher education more affordable and accessible for students in our states, but we fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few,” the coalition wrote.
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The Congressional Budget Office released its economic outlook for the next decade and projected record high debt levels compared to the nation’s Gross Domestic Product.
The CBO projected a decrease in the deficit compared to the major COVID-era spending spree that helped fuel inflation to its current high levels.
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The email from “Norton Protection” said I owed $999.99, which was “charged successfully and it will appear on your bank statement in 24 to 48 hours.” Although I have an account with a leading cybersecurity company, I’ve never paid that much for its products. To “cancel” the charge, I was instructed to call a number, conveniently highlighted in yellow.
All it took to bird-dog my fake debt email was a simple search-engine query of the invoice’s telephone number. It was based in Hawaii. Unfortunately, perhaps, for the real employees of Norton’s help desk, they are likely not stationed in the Aloha State.
In a nation swimming in real debt – with the average American owing an estimated $90,000 – it’s not surprising that “phantom debts” are one of the hottest scams.
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In January, 2001, America had a balanced budget, low debt, and was at peace. Here, briefly, is what lay ahead: war, financial crisis, civil unrest, massive growth of the federal government, and now severe inflation.
Never in the history of America has our government in its ineptitude created such a false economy, risking hundreds of years of hard work on unsound and unworkable economic policies. The Founders wisely relied on dispersion of power. They knew there would be dishonest and incompetent politicians but, in this case, the entire government is infected with deceptive leaders.
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The $3.5 trillion spending bill set up to follow the $1.1 trillion infrastructure bill (which has little to do with infrastructure) should be called what it really is: The Higher Inflation and Bigger Debt Act.
The Democrats would like you to believe it is only a reconciliation bill. This is vital to them because a reconciliation bill only takes 50 senators and the vice president to pass the U.S. Senate.
However, this additional $3.5 trillion comes after trillions of emergency spending prompted by the COVID-19 pandemic. Consider what the Congressional Budget Office has written about the fiscal situation before the $1.1 trillion and $3.5 trillion bills are passed:
Here is what the Congressional Budget Office forecasts (not counting Biden’s enormous spending plan):
“By the end of 2021, federal debt held by the public is projected to equal 102 percent of GDP. Debt would reach 107 percent of GDP (surpassing its historical high) in 2031 and would almost double to 202 percent of GDP by 2051. Debt that is high and rising as a percentage of GDP boosts federal and private borrowing costs, slows the growth of economic output, and increases interest payments abroad. A growing debt burden could increase the risk of a fiscal crisis and higher inflation as well as undermine confidence in the U.S. dollar, making it more costly to finance public and private activity in international markets.”
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The Congressional Budget Office estimated Thursday that the bipartisan Senate infrastructure bill will add $256 billion to the deficit over the next decade, undercutting its backers’ claims the spending had been offset.
In FY2020, the deficit hit a record $3.1 trillion. So far in FY2021, the deficit is $2.2 trillion. The national debt is climbing to $29 trillion for the first time in U.S. history.
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“Columbia and other wealthy universities steer master’s students to federal loans that can exceed $250,000. After graduation, many learn the debt is well beyond their means,” notes the Wall Street Journal.
The Journal reports on Columbia University’s Master of Fine Arts Film program, one of the worst examples, in an article titled “Financially Hobbled for Life: The Elite Master’s Degrees That Don’t Pay Off”:
Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000.
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President Joe Biden’s proposed $2 trillion American Jobs Plan could end up costing taxpayers more than $666,666 per job created.
The Washington Post gave Biden “two Pinocchios” for saying the American Jobs Plan, his infrastructure and jobs proposal, will create 19 million jobs. Both Biden and his Transportation Secretary Pete Buttigieg have made the 19 million jobs claim. The source of the statement is a Moody’s analysis, which CNN pointed out had estimated the U.S. economy would add about “16.3 million jobs over the same period if the infrastructure proposal does not get passed.”
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