On Thursday, January 19th, 2023, the United States government met the debt limit set by congress at 31.4 trillion dollars. This does not mean the sky is falling, but it has started a countdown to what could be a disaster. According to NBC, by as early as June, the U.S. will run out of money and would have to default if congress failed to increase the limit. To understand how we got into this position we have to go back in time. Our government-acquiring debt is a 20-year issue in the making.  

In 2001, the U.S. debt was roughly 5 trillion dollars (about $15,000 per person in the US). Starting in 2002, our government started a streak that is continuing to this day. Since 2002 our government has spent more money every year than it has brought in. To keep spending more money the Treasury started selling securities to investors. These securities are essentially bonds, money is given upfront from investors so the government can keep paying its bills. By 2008 the U.S. had accumulated roughly 10 trillion dollars (about $31,000 per person in the US) in debt. In the last 15 years alone, we have found ourselves with another 22 trillion dollars (about $68,000 per person in the US). This is only a major problem unless our government chooses to do something to pay off some of this debt.  

Thebalancemoney author Kimberly Amadeo writes, “As the dollar value declines, foreign holders, get paid back in a currency that is worth less than when they invested, which further decreases demand.” These factors invest in the U.S. look risky and will force people to look elsewhere. If investors are unwilling to invest in the United States, this is where things such as interest rates increase and make things even more unaffordable. With our country’s rapid inflation in recent years, the last thing Americans need is an interest rate rise. 

However, it is important to remember that our government will do anything in its power to maintain a strong treasury and to get a grip on its finances. Everything from Medicare to our military paychecks, anything the government pays for will be affected if our lawmakers cannot agree on an increase to the amount of debt we can obtain. This problem has been around for 20 years and will probably be solved with another increase in the debt we can take on. But, after 20 years I hope it is finally time for our government to find a way to stop the cause of our debt, before disaster strikes.