US National Debt Surpasses $30 Trillion for the First Time... Aftermath of COVID-19 Response

$7 Trillion Increase Compared to Before the Full-Scale Spread of COVID-19

[Asia Economy Reporter Lim Hye-seon] The United States' national debt has surpassed $30 trillion (approximately 36,270 trillion KRW) for the first time in history. This is an increase of $7 trillion (8,463 trillion KRW) compared to the end of January 2020, before the COVID-19 pandemic fully took hold. The rapid growth in debt is analyzed to be due to expansionary fiscal policies that increased government spending to respond to the economic shock caused by the COVID-19 crisis.

According to major U.S. foreign media on the 1st (local time), the U.S. Treasury Department announced that as of the previous day, the national debt reached $30.01 trillion (approximately 36,282 trillion KRW). The U.S. Congress approved trillions of dollars in spending to support small business owners, the unemployed, and tenants in response to the economic impact during the COVID-19 period.

According to the Congressional Budget Office and others, the U.S. fiscal deficit before COVID-19 in fiscal year 2019 (October 2018 to September 2019) was 4.7% of the Gross Domestic Product (GDP), but it rose to 15.0% in fiscal year 2020 and 12.4% in fiscal year 2021.

Janet Yellen, U.S. Treasury Secretary, recently stated, "I believe it was appropriate to engage in spending through means other than tax increases in response to the economic downturn caused by COVID-19," adding, "Considering the low interest rate environment, it is manageable."

However, some economists and experts have warned that future economic crises or shocks could impair the government's ability to respond effectively.