Many Americans feel anxiety over their personal finances, but the long-term outlook of the nation’s finances as a whole are troubling, too.
Here are Five Facts on America’s fiscal health.
- America’s debt-to-GDP ratio is currently 123 percent.
The U.S. federal debt has escalated from an inflation-adjusted $403 billion in 1923 to $33.17 trillion in 2023. As reported by the U.S. Treasury Fiscal Data, America’s debt-to-GDP ratio, a critical measure of a country's ability to manage its debt, surpassed 100 percent in 2013. About one-third of U.S. debt is held by foreign countries like Japan and China.
2. Social Security’s trust funds are projected to go bankrupt within a decade.
Without reforms, the Social Security Board of Trustees forecasts the depletion of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds by 2034, which would lead to 24 percent benefit cuts that would double the poverty rate among elderly Americans.
3. Congress has not passed the required budget and spending bills on time since 1997.
Congress has only passed all its required appropriations measures on time in four fiscal years since the current system was established: 1977, 1989, 1995, and 1997. This has led to an overreliance on short-term spending bills that do little to address the rising national debt.
4. This year Washington will pay more on interest on the debt than on national defense.
According to the nonpartisan Congressional Budget Office, federal spending on interest payments will amount to $870 billion this year — $48 billion more than is allocated for defense spending. That represents a 32 percent increase from the $659 billion in interest expenses paid last year.
5. The U.S. is adding another trillion dollars to its debt every 100 days.
This rapid increase led the debt to surpass $34 trillion by early January 2024, after first reaching the mark in late December 2023. The rising debt concerns have prompted Moody's Investors Service to downgrade the U.S. government's ratings outlook to negative, highlighting the urgency for effective fiscal measures to address the growing fiscal deficits and debt affordability challenges.
