Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

US Public Debt Unprecedentedly Surpassed $22 trillion, Recession Likely in 2019


Mon 18 Feb 2019 | 12:20 PM
Yassmine Elsayed

By: Yassmine ElSayed

CAIRO, Feb. 18 (SEE) - Official figures released by US Treasury Department revealed that the public debt hit a new milestone, surpassing $22 trillion for the first time ever, fueling speculations about foreseen recession.

On his part, Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a non-partisan organization dedicated to addressing America's long-term fiscal challenges, said the new figure was reached after extra 1 trillion dollars were added in debt over just the last 11 months.

"Reaching this unfortunate milestone so rapidly is the latest sign that our fiscal situation is not only unsustainable, but accelerating," Peterson added.

"As we borrow trillion after trillion, interest costs will weigh on our economy and make it harder to fund important investments for our future."

He noted that an average of 1 billion dollars is paid every day in interest on the debt, and the government will spend a staggering 7 trillion dollars in interest costs over the next decade, adding: "we must put our fiscal house in order and begin to manage our national debt."

According to analysts quoted by media reports, the Trump administration's 1.5-trillion-dollar tax cut and increased government spending have fueled the rapid increase in budget deficits and public debt.

The Congressional Budget Office (CBO) last month estimated that federal budget deficit is about 900 billion dollars in 2019 and exceeds 1 trillion dollars each year beginning in 2022.

Because of persistently large deficits, the public debt is projected to grow steadily, reaching 93 percent of U.S. gross domestic product (GDP) in 2029 and about 150 percent of U.S. GDP in 2049, according to the CBO.

Former Federal Reserve Chairman Alan Greenspan has warned that the rising public debt in the United States could lead to the next economic recession. Greenspan believed that the next U.S. economic recession is going to come "sometime" and it's going to be driven by "dramatically" rising debt.