1,000,000 Simulations Show U.S. Debt “Unsustainable”

According to a million computer simulations run by Bloomberg, there is an 88% chance that the U.S. is on an “unsustainable” path regarding its National Debt. The alert went out following a forecast by the Congressional Budget Office indicating the National Debt will grow to an astonishing $54 trillion in the next decade, greatly due to the rising federal healthcare costs of an aging population. Higher interest rates required to combat inflation is also compounding the problem. National Debt interest payments are expected to triple from nearly $475 billion in fiscal year 2022 to a stunning $1.4 trillion in 2032. By 2053, the interest payments are projected to surge to $5.4 trillion. That amount will be greater than what the U.S. spends on Social Security, Medicare, Medicaid and all other mandatory and discretionary spending programs combined.

According to Bloomberg, the U.S. is paying a record amount of interest on its National Debt. In a fairly optimistic outlook, the debt-to-GDP ratio is expected to rise to 123% in 2034, but that’s at least assuming that the sweeping 2017 tax laws are extended, once certain provisions expire in 2025. In a “higher simulation” scenario, the report indicates the debt-to-GDP burden could be as high as 133.9% in 2034 and 185% in 2050. If that level of debt were to materialize, it could risk America’s economic standing in the world.

Last Friday afternoon, according to the Treasury Department, the National Debt, which measures what the U.S. owes its creditors, hit $34.5 trillion. Just four decades ago, it was hovering at about $907 billion. According to the Committee for a Responsible Federal Budget, a group that advocates for federal debt reduction, President Biden had approved $4.8 trillion in borrowing, which included $1.85 trillion for a COVID relief effort titled the American Rescue Plan and $370 billion for the bipartisan infrastructure bill.

Biden has repeatedly defended the spending by his administration and boasted about cutting the deficit by $1.7 trillion.  While that is about half of the $7.5 trillion that former President Trump added to the deficit while he was in office, it’s far more than the $2.5 trillion Trump had approved at that same point during his term. However, that figure refers to a reduction in the national deficit between fiscal years 2020 and 2022. While the deficit did shrink during that time period, that is largely because emergency measures put into place during the COVID-19 pandemic expired.