U.S. debt eclipses $34 trillion for first time [View all]

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The U.S. national debt has eclipsed $34 trillion for the first time, the Treasury Department said Tuesday, as persistently large annual deficits continue to add to the federal tab.

Roughly three months after the debt first hit $33 trillion, the new milestone comes as lawmakers brace for fiscal showdowns over spending levels in the new year. Government borrowing costs have increased due to the Federal Reserve’s campaign to raise interest rates, spending has remained above pre-covid levels, and tax receipts dropped last year — all worsening the nation’s fiscal outlook.

The $34 trillion in total debt recorded at the end of last week represents a more than $2 trillion increase from the roughly $31.4 trillion in debt held at the start of last year. However, economists are sharply divided over the danger posed by the federal debt. Some experts argue the tide of red ink poses a threat to the nation’s overall fiscal health, while others maintain the federal government has plenty of capacity to borrow without risking an economic crisis. The economy has been growing at a rapid clip in recent quarters, which makes the increase in debt less significant because the borrowed money represents a smaller share of the nation’s economic output.

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President Biden has blamed GOP tax cuts for adding trillions to the deficit, while congressional Republicans blame spending measures passed under Biden and other Democrats. In a statement Tuesday, White House spokesman Michael Kikukawa said congressional Republicans “want to double down on MAGAnomics with more than $3 trillion in giveaways skewed to the wealthy while forcing hardworking Americans to pay the price by cutting Social Security, Medicare, and Medicaid.”

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