The United States is projected to add trillions of dollars to its national debt over the next decade, with the debt expected to surpass $56 trillion by 2034.
Rising spending and interest expenses are outpacing tax revenues, leading to large budget deficits that are projected to reach $1.9 trillion in 2024 and expand to $2.9 trillion by 2034.
The big picture: The debt held by the public is expected to rise to 122 percent of the gross domestic product by 2034, an increase from 99 percent in 2024.
- Discussions on tax and spending policies are intensifying as the 2017 Trump tax cuts are set to expire in 2025, forcing decisions on whether to renew them and how to finance them.
- The fiscal challenges are exacerbated by an aging population affecting social security and Medicare, potential shortfalls in retirement benefits, and high interest rates driving up interest costs on the debt.
- The Biden administration’s actions, such as canceling student loan debt and introducing new aid packages, are contributing to the larger deficits.
- Despite the impact of rising interest rates and debt burden, a surge in immigration is projected to reduce deficits and debt over time by generating additional tax revenues from new immigrant workers.
- The broader economic and political implications of the growing national debt, including potential spending cuts, inflationary concerns, and significance of tax policies, are under discussion among lawmakers and stakeholders.
