US debt reaches $13 trillion for first time
Posted: 03 June 2010 0851 hrs
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WASHINGTON : US debt has reached 13 trillion dollars for the first time in history, the Treasury Department said Wednesday, stoking a political furor over government spending. Amid vast government outlays designed to end the economic crisis, the debt reached a record 13,050,826,460,886.97 dollars on June 1, according to official figures.
The debt has increased by around 1.6 trillion dollars in the last year and more than doubled in the last 10 years. It now stands at just under 90 per cent of annual gross domestic product.
Against this stark backdrop, tackling debt has become a hot political issue in Washington, with Democrats and Republicans trading barbs about who is to blame. Earlier on Wednesday President Obama assailed Republicans for leaving him with the type of spiraling short-term deficits that fuel longer-term debt. The US government suffered its 19th consecutive month of budget deficit in April.
"By the time I took office, we had a one-year deficit of over one trillion dollars and projected deficits of eight trillion dollars over the next decade. Most of this was the result of not paying for two major tax cuts skewed to the wealthy, and a worthy but expensive prescription drug program that wasn't paid for," Obama told an audience in Pittsburgh, Pennsylvania.
"I always find it interesting that the same people who participated in these decisions are the ones who now charge our administration with fiscal irresponsibility. "Despite all their current moralizing about the need to curb spending, this is the same crowd who took the record 237 billion dollar surplus that president Clinton left them and turned it into a record 1.3 trillion dollar deficit."
But Republicans have lambasted Obama for expanding government spending since he came to office through a massive reform of healthcare. The debt has risen by around 2.4 trillion dollars since Obama took office in January 2009 and rose 4.9 trillion dollars in the eight years George W. Bush spent in office.
"13 is certainly an unlucky number, especially for our children and grandchildren who will be left to dig out of trillions of dollars worth of debt," said Republican Senator Judd Gregg, a frequent critic of Obama's budget policies. "This dangerous and unsustainable level of debt cannot continue without bankrupting our country, and I urge the majority to slow its explosion of spending and borrowing before it is too late." But economists are sharply divided over how quickly the US should move to rein in spending.
Some believe that a rapid tightening of government expenditure, or an increase in taxes could remove the one support that is keeping the United States from falling deeper into recession. But as debt-contagion fears grip Europe others have warned that the United States has limited time to forge a credible plan to end its own fiscal woes.
Even the normally cautious Federal Reserve Chairman Ben Bernanke has warned that politically painful tax hikes or spending cuts could be needed to balance the budget. Obama has launched a bipartisan debt commission to investigate ways of tackling the problem. It is expected to produce its findings by the end of the year. - AFP/jy
