US national debt reaches new record, surpassing $35 trillion. Is the United States of America (USA) facing a debt crisis?
The United States of America's gross national debt has exceeded $35 trillion for the first time, according to data released by the US Treasury Department on Monday, July 29. The US gross national debt consists of two components: the debt held by the public and intragovernmental holdings. As per the fiscal data available on the US Treasury website, the country's total public debt was $35,001,278,179,208.67.
This milestone comes just over six months after the country's gross national debt exceeded $34 trillion in January of this year.
In other news, the US Treasury has revised its estimate for federal borrowing for the current quarter and projected a decline in the government's cash buffer towards the year-end, just before a potential new battle over the debt limit.
The Treasury Department stated on Monday that it now anticipates $740 billion in net borrowing for July through September, down from the previous prediction of $847 billion released on April 29. The decrease was expected by most bond dealers.
The authorities have maintained their estimated cash balance for the end of September at $850 billion.
In a forecast that will be closely watched by dealers due to its potential implications for any upcoming debt-limit battle, the Treasury projected a year-end cash balance of $700 billion. This stockpile would then be reduced after the debt ceiling by law kicks back in at the start of next year - unless Congress passes an increase or new suspension.
Regarding this quarter, the Federal Reserve's decision to start slowing the runoff of its holdings of Treasuries has relieved the government's need to sell more debt to the public, as indicated by the Treasury's statement. The Fed's plan had not been in place when the Treasury released its previous borrowing estimate. The department also began this quarter with more cash on hand than originally projected.
Cash Balance:
The Treasury's cash balance at the end of June, approximately $778 billion, exceeded the $750 billion level targeted by the Treasury at the end of April. This stockpile was about $768 billion as of last Thursday.
"Treasury's year-end cash balance was approximately in the middle of the expected range and indicates a moderate decline relative to an elevated level of cash expected at the end of the third quarter," said Zachary Griffiths, a senior fixed-income strategist at CreditSights.
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