You wouldn’t have known since few in Washington are really talking about it, but the national debt problem hasn’t gotten any better. In fact, it is getting worse and will continue to deteriorate unless something is done.
The state of the debt is far from positive. Gross debt is nearing a miserable milestone of $20 trillion. Meanwhile, the debt held by the public, which is the gross debt minus what the government owes itself, is higher than it’s been since World War II as a share of the economy (77%). The latest budget numbers also show trillion-dollar deficits returning within six years. And the long-term forecast shows the debt growing even more in the years to come, reaching heights never seen before.
This is important for policymakers to recognize as some critical events approach. Rising interest rates will make borrowing to finance the debt more expensive. And possible action on key issues such as health care, taxes, and infrastructure could make the debt situation better or worse than expected.
Our infographic illustrates the current situation and why it matters. President Trump and Congress need to keep this in mind as they prepare their budgets.