Huge fiscal deficits have led to record levels of federal debt

The latest data released by the U.S. Treasury Department on Sunday (November 24) showed that the total debt of the U.S. federal government reached a record high of $36.035 trillion.

Xinhua reported that the huge fiscal deficit is the main reason for the increase in the total debt of the US federal government. In fiscal year 2024 (October 1, 2023 to September 30, 2024), the U.S. federal government spent $6.75 trillion, revenue was only $4.92 trillion, and the fiscal deficit reached $1.83 trillion. Since the start of fiscal year 2025, the federal government has spent $584 billion but received only $327 billion in revenue.

In recent years, the size of the US federal government debt has expanded rapidly. In September 2023, the federal government debt crosses the $33 trillion mark. Between the beginning of January and the end of July, federal government debt rose from $34 trillion to $35 trillion. In just over three months since then, the federal government has added another $1 trillion to its debt.

The Congressional Budget Office projects that U.S. federal government debt held by the public could rise above 106% of gross domestic product in 2027, breaking the record set in 1946.

McGignas, chairman of the Federal Budget Accountability Board, said in a statement that the rising federal government debt poses serious domestic economic and geopolitical risks, dragging down the U.S. economy, leading to higher inflation and higher interest rates, and further squeezing the federal budget space. With public debt likely to reach an all-time high as a share of GDP over the next two years, the outlook for federal government debt is grim.