US debt hits $36 trillion as its global economic share falls below 15%

By Al Mayadeen English
Source: Agencies
18 Jan 2025 11:43
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Sputnik notes that the US' national debt has surged from $28 trillion in 2021 to over $36 trillion today.

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The US Department of the Treasury building is seen in Washington, Saturday, Dec. 7, 2024 (AP)

By mid-January, the United States' debt had reached an unprecedented $36.174 trillion, equating to $106,400 per American, Sputnik's calculations revealed, based on data from the US Treasury Department.

In 2024 alone, the US debt increased by 7% ($2.4 trillion), the news agency noted. During Joe Biden's presidency, the US share of the global economy dropped below 15% for the first time and is expected to decline further to a historic low of 14.76% by the end of his term, Sputnik’s analysis of World Bank and IMF data indicated.

The news agency highlighted that the national debt has surged from $28 trillion in 2021 to over $36 trillion today.

Treasury to begin 'extraordinary measures' to prevent government debt default

In a related context, US Treasury Secretary Janet Yellen announced on Friday that her department will begin implementing "extraordinary measures" next week to prevent a government debt default, just days before President-elect Donald Trump assumes office.

With the government approaching its borrowing limit, Yellen informed congressional leaders that these measures would commence on Tuesday, the day following the inauguration. This will require the incoming Trump administration to address the issue of the debt ceiling—the legal cap on government borrowing to meet existing financial obligations—immediately upon taking office.

Historically, Congress has routinely voted to raise the debt ceiling. However, it has become a contentious issue in recent years, with Republican fiscal conservatives advocating for significant spending cuts instead.

"Extraordinary measures" allow the Treasury to continue meeting the government’s financial obligations, averting a potentially destabilizing default on the national debt.

On Friday, Yellen stated that "the period of time that extraordinary measures may last is subject to considerable uncertainty," highlighting the difficulty of forecasting government revenues and expenditures months in advance.

In her letter, Yellen urged Congress to act promptly to protect the full faith and credit of the United States. She also outlined specific steps the Treasury would take, including delaying certain investments in the Civil Service Retirement and Disability Fund and redeeming a portion of its existing investments.

Similarly, additional investments in the Postal Service Retiree Health Benefits Fund will be temporarily suspended but will be fully restored once the debt ceiling is raised or suspended.

Yellen assured that these actions would not impact federal retirees or employees.

In mid-2023, US lawmakers voted to suspend the debt limit following weeks of intense negotiations, temporarily removing the threat of default. However, the limit was reinstated on January 2, 2024, and set at $36.1 trillion, matching the outstanding debt total as of the previous day.

During budget discussions in December, Trump advocated for raising or even eliminating the debt ceiling altogether, though his efforts were unsuccessful at the time. On Thursday, Trump’s nominee for Treasury Secretary, Scott Bessent, testified during his confirmation hearing, pledging to work with the incoming President to remove the limit if desired. He also assured lawmakers that the United States would not default on its debt under Trump's leadership.

Earlier this month, Fitch Ratings warned of "significant fiscal policy challenges" for the US in 2025, citing the debt ceiling, appropriations, and expiring tax cuts amid already substantial deficits and rising debt levels. The agency expressed skepticism that these issues would be resolved quickly, attributing delays to longstanding weaknesses in federal budget processes and a narrow Republican majority in the House of Representatives.