Finance

Home page

Finance

US national debt hits all-time record

17 January 2011 07:35 (UTC +04:00)

Baku - APA-Economics. U.S. federal debt has broken all records in the history, having exceeded $ 14 trillion mark, reported Associated Press on Sunday, Planet Insane reported.

According to the agency, currently the U.S. governmentâ€™s debt amounts to 14.02 trillion dollars, which means that every US citizen would owe $45,300 each when calculated on individual terms.

At the beginning of June 2010 U.S. government debt amounted to 13.051 trillion dollars. Nearly half of the current amount has been accumulated by the government over the past six years - in 2005 the debt was 7.6 trillion dollars.

One of the measures needed to combat the ever-increasing public debt, according to U.S. Treasury Secretary Timothy Geithner is to increase the prescribed limit of public debt, which now amounts to 14.3 trillion dollars. Failure to take such measures, according to head of U.S. Treasury, could have the consequences, comparable with the global financial crisis of 2008-2009.

According to Geithner, this limit will be reached by the end of March, and by mid-May it will be exceeded.

Last year, Barack Obama had promised to fight the budget deficit and said that the U.S. administration had prepared the budget for fiscal year 2011, keeping in mind the economic situation in the country and the need to reduce inefficient spending.

According to head of Congressional Budget Office Douglas Elmendorf, U.S. federal debt as a share of GDP would exceed its historical peak of 109 percent by 2025 and would reach 185 percent in 2035. In 2009, volume of the U.S. GDP was 14 trillion dollars.

Therefore, Congressional Budget Office considers it very important to as soon as possible find ways to increase budget revenues and reduce costs, warning that the federal debt may in the foreseeable future reach the unacceptable levels.