May 24, 2023

How the U.S. National Debt Reached $31.4 Trillion Transcript

How the U.S. National Debt Reached $31.4 Trillion Transcript
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A look at what the nation owes and the latest on the debt ceiling negotiations on Capitol Hill. Read the transcript here.

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William (00:00):

If you stacked up the full debt of the United States in $100 bills, you could make, not one, not two, but 13 piles of cash as tall as the Washington Monument. Lisa Desjardins takes a step back from the debt stealing negotiations on Capitol Hill to account for what the nation owes.

Lisa Desjardins (00:19):

Okay, the national debt. All of the money the US government owes is currently at $31.4 trillion. But what does that mean? For one, that’s decades worth of government spending. Things like Medicaid and other healthcare, the US military, food stamps and other benefits, fixing roads, Head Start and schools, the environment, national parks and a thousand other areas.

It’s simple. For years, what the US government spent on those things was far greater than the amount of money and had brought in to pay for them. That stacked up to that $31.4 trillion in debt we have now. That’s an enormous, almost nonsensical number, so let’s put it a different way. If all Americans pitched in, it would take $94,000 from each one of us, every man, woman, and child to pay off the national debt. The US national debt in dollars is by far the largest in the world, but we also have the largest economy in the world, and that’s how most experts approach this.

Think of it this way, the national debt is a weight, sometimes a heavy weight like a barbell at a gym. But what matters is not just the size of the debt but the size of the economy or person trying to handle that debt. So how big is our debt compared to the economy trying to hold it up. Back in the year 2000, it was a relatively easy lift. The debt equaled just 36% of the combined earnings goods and everything the US economy produced that year, but it’s shot up and now the US is shouldering a national debt that is 98% of what we will produce this year. And much worse, if nothing changes in 30 years, the debt is forecast to soar to be nearly twice as large as everything the economy produces, a potentially overwhelming weight for the US economy.

Michael Peterson (02:20):

As the debt keeps creeping up, we just are placing a greater and greater burden on the next generation.

Lisa Desjardins (02:25):

Michael Peterson is CEO of the Peterson Foundation, a nonprofit group focused on the US budget long term, and he’s particularly worried about the cost of the debt.

Michael Peterson (02:36):

The interest cost is really what is the cost of the debt. If you think over a long period of time, by about 2050, approximately 50% of federal revenues will go towards interest only.

Lisa Desjardins (02:48):

That means by 2053, when little kids today are in their thirties, the interest costs on the national debt will be the largest expenditure the federal government has, and 50%, half of the taxes that these guys pay will go to those interest costs. That will constrict funding for everything, including what we mentioned earlier, healthcare, the military, food stamps, education, and the environment. Even Social Security benefits would be significantly cut. There is still time to change course and multiple ways to address the debt, but the longer lawmakers wait to tackle it, the deeper and more painful future cuts and the future burden will be. For the PBS News Hour, I’m Lisa Desjardins.

William (03:34):

In just the time it took Lisa to tell that story, the US slipped nearly $10 million deeper into debt and each passing second brings the country closer to a first ever default. Lisa has spent the day chasing down lawmakers and she now joins us to bring us up to speed. Lisa, terrific report on the debt there, but back to these talks on Capitol Hill. We are right at the precipice here. What is the current status of negotiations?

Lisa Desjardins (04:00):

We’re getting close. As you said, I was on the Hill with our producer, Kyle Madora. This is where we are. Talks sort of standstill at this moment. In fact, Speaker McCarthy earlier today said, talks had broken down. Really, there is some agreement over many areas, but they are not making any distance over two big areas. That is work requirements which Republicans want to add more of for some benefits. And then the other one here, you see the White House lawmakers coming in for the morning meeting. Republicans also say they are just… There’s Speaker McCarthy, simply too far apart when it comes to spending and funding. One dynamic we’ve seen today, William, is Speaker McCarthy again and again coming and talking to reporters. Republicans feel like they’re winning the sort of public argument here. We’re seeing Democrats just starting to speak to us more, but I think right now the House is expected to recess on Thursday with no deal, and I think this weekend we could still be talking about this.

William (04:54):

Well, you I know in addition to all your other reporting, have some reporting about what the Treasury Department might be doing in case we get to this dreaded moment. What is that?

Lisa Desjardins (05:04):

Sources familiar have confirmed that the US Treasury has sent out notices to government agencies asking them to hold off on any payments that don’t have specific due dates right now as something that maybe proforma or just kind of happenstance they were sending out these payments, but they can wait. They have a deadline that they don’t have to meet. They’re saying, hold back on that. The US Treasury is essentially trying to hold onto some kind of cushion of cash because it is getting concerned that we’re close to the deadline and it may come down to a few hundred million dollars, which is usually not a lot for the US Treasury, but could make a big difference in these negotiations.

William (05:40):

Lisa Desjardins, as always, thank you so much.

Lisa Desjardins (05:42):

You’re welcome.

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