US national debt nears $31 TRILLION for the first time ever and is still rising due to Joe Biden’s semiconductor vow, student loan forgiveness and green plans… despite Covid spending halt
- The national deficit is on track to hit $31 trillion as soon as this month
- President Joe Biden continues to up U.S. spending including on student loan forgiveness, semiconductor chip manufacturing and green initiatives
- COVID spending has finally halted after $4.5 trillion was allocated to assist American people and companies in the midst of the pandemic
- Biden has touted the drop in deficit coming off of the health emergency
- Overall debt has continued to climb and has shot up during Biden’s presidency
- In Biden’s two years the U.S. has seen record-high inflation and gas prices along with a recession after two straight quarters of negative GDP growth
National debt is set to hit $31 trillion as early as this month – a new milestone showing the dire financial state of the U.S. as President Joe Biden continues to tout economic wins.
While the massive boost in spending has quelled from the coronavirus pandemic, a result of multiple trillion-dollar aid packages, the economy has not recovered beyond the health crisis as anticipated.
A debt calculator shows the $30.88 trillion as of Monday evening, with the figures ticking up every second by the thousands.
Republicans have slammed Democratic initiatives from the current administration for tacking onto the debt at exponential levels – even in the midst of record-high inflation and gas prices and a recession with two consecutive quarters of negative GDP growth.
Biden announced last month his administration’s plan to wipe out $10,000 in student loan debt for borrowers making less than $125,000 individually or $250,000 jointly. That forgiveness amount would rise to $20,000 if the borrower was a recipient of a Pell Grant.
While there are a range of estimates, one study suggests that taxpayers could end up paying $1 trillion to help pay off the loads of student debt that will now be canceled. A separate analysis says the plan could end up costing every American more than $2,000 in taxes each year – even those who did not benefit from the relief.
The national deficit is on track to hit $31 trillion as soon as this month – as President Joe Biden continues to up spending including on student loan forgiveness, semiconductor chip manufacturing and green initiatives
Another big spend is coming from recently passed legislation that would allocate $200 billion over the next five years to boost American semiconductor chip manufacturing.
The CHIPS and Science Act is meant to help improve competition with China as many U.S. manufacturers were forced to import chips with the lack of a market in America.
Semiconductor chips are essential to the production of cars, smartphones and some medical equipment.
Biden’s famed Inflation Reduction Act includes $433 billion in new spending, including the majority of that – $369 billion – going toward energy security and climate change initiatives.
During COVID-19, the U.S. allocated $4.5 trillion to individuals and companies to help with economic hardship. But Republicans warned that the final package may have gone too far and unnecessarily added onto the national debt.
Signs that the pandemic is over includes Biden ending the federal student loan repayment moratorium. He extended the coronavirus enabled pause for the fifth and final time last month, and borrowers will need to resume their payments in January 2023.
The last pause extension came at the same time Biden announced his plan to forgive between $10,000 and $20,000 for a huge amount of Americans with outstanding federal student loan debt.
Despite the economic woes, Biden is boasting of a dramatic drop in the annual budget deficit under his leadership, which is mostly a recovery figure due to the slowing of the coronavirus pandemic.
Part of Biden’s massive spending could cost American taxpayers $1 trillion after the president announced $10,000 to $20,000 in student loan forgiveness for borrowers making less than $125,000
‘You know, Republicans talk about being fiscally responsible,’ Biden said at a Democratic National Committee (DNC) reception last week. ‘Last year, I reduced the deficit $350 billion. You know how much this year, not counting the Medicaid changes? One trillion seven hundred billion dollars.’
‘So I don’t want to hear it from Republicans about fiscal responsibility,’ the president added.
COVID led to a sharp economic downturn in 2020 with the government spending a record-breaking $3.1 trillion more than the revenue it collected.
In 2021, after Biden took office, the budget deficit fell marginally to $2.8 trillion and is expected to be somewhere near the $1 trillion mark by the end of the current fiscal year on September 30, 2022.
Pressure on the federal government to keep pumping out cash – including to forgive even more student loans, enhance green initiatives and boost competitiveness – will just add to the increasing debt calculation.
The Congressional Budget Office estimates that Biden’s Inflation Reduction Act, which was passed and signed into law last month, will continue to raise the deficit through 2026.