US National Debt Surpasses $40 Trillion, Raising Concerns Over Future Fiscal Policy

WASHINGTON, August 23. /TASS/. The US authorities may have to take measures that could provoke public discontent to tackle the problem of a record-high public debt, which has exceeded $40 trillion, The Washington Post reported.

"As the national debt surpasses $40 trillion, lawmakers may soon be compelled to make some long-deferred choices that will leave few Americans unscathed," the story says.

"Year after year, the federal government has spent more than it collected in taxes. Each annual shortfall increased the national debt, slowly at first and then by leaps, defying warnings of an inevitable reckoning."

The publication notes that the yield of 30-year Treasuries exceeded 5.27%.

"This is what the bond market is trying to signal: We’re going to have to make choices that hurt growth," said Adam Abbas, who manages $4 billion in bonds for the Oakmark Funds. "We have two levers to do that: raise taxes or cut spending. Either option is not politically popular, and it will never be popular, but at some point we have to address the problem."

"What I worry about is we’re on the verge of sort of a real debt spiral, which happens when your interest [bill] is growing faster than your economy," said Marc Goldwein, senior policy director for the nonpartisan Committee for a Responsible Federal Budget, a non-profit organization that analyzes government funding.

The story says that the United States currently pays about $1 trillion annually in interest on the national debt.

According to the Peterson Institute for International Economics, without reforms of government spending or taxation, the country’s debt could reach $50 trillion in six years.