Published: November 9, 2023 8:43 am
Author: RT
The country’s $31.4 trillion debt ceiling was exceeded in January, and later scrapped altogether until 2025
The US national debt could surge by $20 trillion over the next decade, the Bank of America (BoA) said in a note on Tuesday, citing data from the Congressional Budget Office.
According to the forecast, the current outstanding public debt amounts to roughly $33.6 trillion, but at the pace it is growing and due to “fiscal excess in the 2020s,” it is likely to grow by $5.2 billion daily for the next 10 years, which would put it at around $54 trillion by 2033.
According to BoA, one of the factors leading to a further surge in debt is the sharp increase in the federal deficit, which jumped by $320 billion to $1.7 trillion this year, forcing the Treasury Department to sell trillions of dollars worth of fresh bonds. The rise in annual interest payments caused by soaring bond yields is also weighing on the federal budget and widening deficits, the bank noted.
“US public debt is… more than the combined GDPs of China, Japan, Germany, and India,” Bank of America investment strategist Michael Hartnett noted in the forecast. He warned, however, that Washington was unlikely to stop taking loans even if the federal deficit is contained, because borrowing is seen as a means to fuel economic growth and help drive the circulation of money.
“Likely central banks may simply bail out governments in coming years via quantitative easing and the introduction of yield curve control,” Hartnett added.
READ MORE: Experts worried about US, UK and Italian economies – Reuters
The US exceeded its debt ceiling, which was legally set at $31.4 trillion, in January 2023. After months of warnings of an imminent and economically disastrous default from the US Treasury, President Joe Biden in June signed a bipartisan debt bill that allowed the limit to be lifted until January 2025. This effectively allowed the government to keep borrowing without limits through next year. Debt spiked to $32 trillion less than two weeks after the bill was approved, and has been piling up ever since.
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