US government debt to top $54 trillion in next decade, CBO says (2024)

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US government debt to top $54 trillion in next decade, CBO says? ›

The Congressional Budget Office cited an aging population and health care costs. The federal government's record-high national debt is set to get even bigger, reaching a massive $54 trillion by the year 2034.

Over the next three decades, debt will increase from 97% of GDP in FY2023 to 172% of GDP in FY2054 (a 75 percentage point jump). CBO adjusted its projection of this year's (FY2024) debt held by the public to be $509 billion higher than expected in last year's baseline report.

A nation saddled with debt will have less to invest in its own future. Rising debt means fewer economic opportunities for Americans. Rising debt reduces business investment and slows economic growth. It also increases expectations of higher rates of inflation and erosion of confidence in the U.S. dollar.

How did USA owe China so much money? The U.S. debt to China is approximately $1.059 trillion. That's 27.8 percent of the $3.8 trillion in treasury bills, notes, and bonds held by foreign countries. The rest of the $19.9 trillion national debt is owned by either the American people or by the U.S. government itself.

Summary: PWBM estimates that---even under myopic expectations---financial markets cannot sustain more than the next 20 years of accumulated deficits projected under current U.S. fiscal policy.

In CBO's projections, federal budget deficits total $20 trillion over the 2025–2034 period and federal debt held by the public reaches 116 percent of GDP. Economic growth slows to 1.5 percent in 2024 and then continues at a moderate pace.

Is the US national debt actually a problem? While it exceeds $34 trillion — 122% of the US gross domestic product — these numbers don't necessarily point to a looming disaster. The $20 trillion in new debt added in the last 14 years may not be bringing us closer to a day of reckoning.

Eliminating the U.S. government's debt is a Herculean task that could take decades. In addition to obvious steps, such as hiking taxes and slashing spending, the government could take a number of other approaches, some of them unorthodox and even controversial.

Who is the largest owner of U.S. national debt? ›

The largest holder of U.S. debt is the U.S government. Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.

(Bloomberg) -- China sold a record amount of Treasury and US agency bonds in the first quarter, highlighting the Asian nation's move to diversify away from American assets as trade tensions persist.

If China (or any other nation that has a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.

China owns 384,000 acres of American agricultural land. That's a 30% increase just since 2019. And on top of that, they own land near an air force base in North Dakota.

China owes the United States $1.3 trillion, which is the most debt out of all the countries that are its debtors. Japan was the primary debt holder until 2008, but now comes in second place, with $1.2 trillion. Other countries with outstanding U.S. debt include Russia, India and South Korea.

According to the Bank of Russia's estimate, external debt of the Russian Federation as of March 31, 2024 totaled $304.0 billion, having decreased by $12.8 billion, or by 4.1%, since the end of 2023.

The national debt will rise substantially over the coming decades. Debt held by the public equaled 97 percent of gross domestic product (GDP) at the end of fiscal year 2023. Under current law, CBO projects that ratio will continue to climb — reaching 166 percent of GDP in 2054.

CBO's Budget and Economic Outlook, typically produced in January each year and updated in August, includes an economic forecast and projections of spending and revenues under current law—known as baseline projections—over the next 10 years.

CBO projects debt will reach $144 trillion by 2053, equivalent to $1 million per American household ($500,000 after adjusting for projected inflation). This is more than four times median household net worth ($122,000).

According to the WSJ, only 35% of the loans have been repaid at maturity as scheduled in 2024, compared with 99% in 2021. This is worse than the 37% repayment rate that was reached in 2009 in the wake of the great financial crisis, according to Moody's Ratings.