US debt made the history: $22 trillion

The US national-debt load surpassed $22 trillion on Monday, according to the Treasury Department. It’s the first time that the total outstanding public debt has topped that threshold.

It stood at $19.95 trillion when President Donald Trump took office on Jan. 20, 2017.

The debt figure has been accelerating since the passage of Trump’s $1.5 trillion tax cut in December 2017 and action by Congress last year to increase spending on domestic and military programs.

The national debt is the total of the annual budget deficits. The Congressional Budget Office projects that this year’s deficit will be $897 billion — a 15.1 percent increase over last year’s imbalance of $779 billion. In the coming years, the CBO forecasts that the deficit will keep rising, top $1 trillion annually beginning in 2022 and never drop below $1 trillion through 2029.

The recent acceleration in outstanding debt was driven by two recent legislative changes. The first was the tax-reform law pushed by President Donald Trump and passed by the GOP. The law is projected to add about $1.5 trillion to the debt over the first 10 years it is in effect.

The second was the large, bipartisan budget deal that passed Congress. The combination of slashed tax rates, lowering government revenue, and increased spending adds up to a higher debt load.

Traditionally, economists have warned that the high levels of government debt would cause problems for the US economy as private investment is crowded out by public debt.

But recently, progressive lawmakers, such as Rep. Alexandria Ocasio-Cortez, and some economists have started to latch on to modern monetary theory (MMT), an idea that posits the nominal amount of debt the US holds is not in and of itself an issue.

Rather, MMT adherents say that government spending and debt accumulation is constrained by tangible assets. So if public indebtedness climbs with no effect on inflation, which seems to be the current case given the tame inflation levels in the US, the debt load is not posing a substantial threat to the economy.

Michael Peterson, head of the Peter G. Peterson Foundation, says “our growing national debt matters because it threatens the economic future of every American.”