The US National Debt Now Surges By Whopping $684bn

September 9, 2024

The US National Debt now surges by a whopping $684bn with Fitch warning that America has failed to fix the growing debt burden.

The U.S. national debt has surged dramatically, increasing by more than half a trillion dollars in just three months.

According to the U.S. Treasury, the national debt rose from approximately $34.64 trillion on June 3 to nearly $35.32 trillion by September 3—a staggering increase of $684 billion.

This spike follows shortly after the national debt crossed the $35 trillion threshold.

Fitch Ratings has issued a warning regarding the escalating debt and persistent deficits.

In a recent commentary, Fitch affirmed its long-term “AA+” rating for the U.S. with a stable outlook, citing the nation’s high per capita income, its status as the largest economy globally, and a robust business environment.

However, the agency has withheld an upgrade to a “AAA” rating due to concerning fiscal conditions.

Fitch notes that the U.S. faces significant constraints, including high fiscal deficits, a substantial interest burden, and government debt exceeding twice the median for “AA” rated countries.

The report highlights that the government has not adequately addressed the growing fiscal deficits or the increasing debt burden, particularly in light of anticipated spending increases associated with an aging population.

While the U.S. benefits from the dollar’s position as the world’s reserve currency, Fitch warns that continued reliance on debt to finance expenditures could undermine trust in both the U.S. and the dollar.

“Persistent increases in the public debt burden would heighten vulnerability to economic and confidence shocks,” the report states.

Last year, Fitch downgraded the U.S. long-term rating from the “AAA” standard to “AA+,” citing expected fiscal deterioration in the coming years.

As the national debt continues to rise, concerns about the country’s fiscal health remain at the forefront of economic discussions.

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Also Read: The US Treasury Direct is Now Freezing Customer Accounts

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The Treasury now recovers a whopping $1.3bn in unpaid taxes from high net worth individuals who sought to dodge paying.

The IRS announced on Friday that it has collected $1.3 billion from wealthy tax evaders since last fall, attributing this success to increased enforcement efforts funded by President Joe Biden’s climate, health care, and tax legislation enacted in 2022.

Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel visited an IRS campus in Austin, Texas, to highlight this achievement amid warnings from Republicans about potential budget cuts for the agency if they regain control of the White House and Congress.

In her speech, Yellen pointed out that in 2019, the wealthiest 1% of Americans were responsible for over 20% of unpaid taxes, leaving a heavier burden on average taxpayers.

“To address this, we’ve directed IRS funding toward substantial investments to tackle tax evasion,” she stated.

In 2023 and 2024, the IRS initiated several programs targeting high-income individuals who have not paid their tax obligations.

The focus is on taxpayers with incomes exceeding $1 million and tax debts over $250,000.

According to IRS officials, nearly 80% of the 1,600 millionaires identified for delinquent taxes have since made payments, resulting in over $1.1 billion recovered.

Additionally, in the first six months of a new initiative launched in February 2024, the IRS collected $172 million from 21,000 wealthy individuals who had not filed tax returns since 2017.

Republicans have advocated for cuts to IRS funding, with Donald Trump’s presidential campaign promising to significantly reduce federal agency spending.

Trump’s campaign also criticized Democratic nominee Kamala Harris for her role in hiring 87,000 new IRS agents, a claim that stems from a Treasury proposal to expand the IRS workforce over the next decade if additional funding is secured.

With around 50,000 IRS employees expected to retire in the next five years, the agency is seeking to bolster its staff, reports ABC News.

The National Taxpayer Advocate, an independent IRS oversight body, reported that the IRS currently employs about 681 armed agents.

This year, the IRS also launched a program called Direct File, allowing individuals with simple W-2 forms to directly calculate and submit their tax returns to the agency.

In April, the IRS noted that participants in this program claimed over $90 million in refunds.

While 12 states participated in the Direct File program for the 2024 tax season, more states, including Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine, are set to join for the 2025 tax season.

Also Read: A Massive US Bank is Now Closing Credit Cards

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