In the Red

Uncle Sam’s IOU has topped $40T for the first time.

On Tuesday, the Treasury reported that the gross national debt reached $40.05T and has more than doubled since January 2017 (see what $40T really looks like). In the last 10ish years, the U.S. has racked up ~$20.1T in debt (~$11.6T during President Trump’s two terms so far, ~$8.5T during former President Biden’s tenure).

Some major debt contributors:

• Increased spending on federal line items like Social Security, Medicare, and Defense (~$7T)
• COVID-19 relief (~$5.6T)
• Tax cuts and extensions (>$2.2T)
• A rise in interest payments on the national debt (currently ~$1T annually)

Economists say the threshold isn’t economically significant by itself, but pushes the U.S. debt-to-GDP ratio to ~125% (Uncle Sam’s debt is 25% larger than the country’s annual production). Watchdogs warn the spend-more-than-you-make trend could lead to a wider economic crisis if unchecked. (See your share of the tab.)

Wonderin’ how national debt works? Stay on the lookout for TPO Explains tomorrow, where we’ll break it down.

ETERNAL PERSPECTIVE
Because our hope is built on God’s promises—not our financial futures—we can be content and even joyful in the face of massive national debt. In Christ, we are fabulously wealthy. The saints have “become rich” through the poverty of Jesus, guaranteed a “glorious inheritance” that can’t slip suddenly away when the economy takes a turn.

“For you know the grace of our Lord Jesus Christ: Though he was rich, for your sake he became poor, so that by his poverty you might become rich.”
2 Corinthians 8:9 (CSB) (read full passage)