The federal IOU is now at $34.5 trillion, or about $11 trillion higher than where it stood in March 2020.
Fed Chair Jerome Powell said recently that"this is something that elected people need to get their arms around sooner rather than later." The watchdog agency estimates that debt held by the public, which currently totals $27.4 trillion and excludes intragovernmental obligations, will rise from the current 99% of GDP to 116% over the next decade. That would be"an amount greater than at any point in the nation's history," theThe agency forecasts a $1.6 trillion shortfall in fiscal 2024 — it is already at $855 billion through the first seven months — that will balloon to $2.6 trillion by 2034.
"America should be quite aware that we have got to focus on our fiscal deficit issues a little bit more, and that is important for the world," the head of the largest U.S. bank by assets said. "The huge obvious problem is that the U.S. federal debt is now on a completely unsustainable long-term trajectory," analysts at Wolfe Research said in a recent note. The firm worries that"bond vigilantes" will go on strike unless the U.S. gets its fiscal house in order, while rising interest costs crowd out spending.