The national debt of the United States has reached a historic high of $34.667 trillion, according to the latest figures from the Treasury Department’s Debt to the Penny system. This milestone was hit on May 31st, with an increase of $677 billion since the beginning of 2024, when the debt was at $33.990 trillion.

This record-breaking debt comes at a time when the Congressional Budget Office (CBO) has issued a warning about the impact of the nation’s rising debt on American earnings. The CBO predicts that if current debt trends continue, income growth could decrease by 12% over the next three decades and by 13% annually by Fiscal Year (FY) 2049. If the debt continues to rise rapidly, the reduction in income growth could be as much as 33% over the next three decades and 42% annually by FY 2049. This could result in a projected loss of about $14,500 per person in FY 2054, in today’s currency.

The CBO attributes this decrease in household income to “crowding out,” an economic theory that explains how high levels of debt and deficits can impede economic growth on both a national and individual level. The risks associated with high debt and deficits include hindering economic growth, increasing interest rates, straining the federal budget with rising interest payments, creating geopolitical challenges, making it difficult to respond to emergencies, burdening future generations, and raising the risk of a fiscal crisis.

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