U.S. federal debt soars to new high, triggers more worries: WSJ

Photo taken on July 29, 2024 shows the U.S. Treasury Building in Washington, D.C., the United States. (Xinhua/Hu Yousong)

"We've learned we borrowed more than we realized we could," Jason Furman, a Harvard economist who was a top aide to President Barack Obama, was quoted as saying. "And we've actually borrowed more than we expected."

NEW YORK, Sept. 17 (Xinhua) -- This year's budget deficit of the United States is on track to top 1.9 trillion U.S. dollars, or more than 6 percent of economic output, a threshold reached only around World War II, the 2008 financial crisis and the COVID-19 pandemic, The Wall Street Journal (WSJ) reported on Monday.

"Publicly held federal debt -- the sum of all deficits -- just passed 28 trillion dollars or almost 100 percent of GDP," it noted. "If Congress does nothing, the total debt will climb by another 22 trillion dollars through 2034. Interest costs alone are poised to exceed annual defense spending."

Economists and policymakers already worry that the growing debt pile could put upward pressure on interest rates, restraining economic growth, crowding out other priorities and potentially impairing Washington's ability to borrow in case of a war or another crisis, said the report.

"There have been scattered warning signs already, including downgrades to the U.S. credit rating and lackluster demand for Treasury debt at some auctions," it said.

"Federal debt and deficits have blown past various imagined red lines and feared consequences have not materialized," said the WSJ article. "The dollar remains the world's reserve currency, giving the U.S. far more running room than other major countries ... There is risk, but there is no fiscal crisis."

"We've learned we borrowed more than we realized we could," Jason Furman, a Harvard economist who was a top aide to President Barack Obama, was quoted as saying. "And we've actually borrowed more than we expected."

Polls show the public is concerned about the deficit, but they also prefer politicians who dangle tax cuts, stimulus checks and money for the military, the report added.