Last week, the United States national debt reached $30 trillion, and with that comes interest- but how much, and will it be a problem for average Americans?
Financial expert George Conboy with Brighton Securities says as the U.S. economy grows and could surpass the debt, meaning return payments won’t be a problem, according to Rochester First. However, a future recession or depression could make the situation more complicated.
“I’m more concerned about the total amount of debt — can we make the payments, and what are interest rates going to do over the next few years to the federal government’s ability to keep up with that debt? Those are real concerns — but it’s not the end of the world,” said Conboy.
Narayana Kocherlakota, Professor of Economics at the University of Rochester, says while some other governments own about 25% of that $30 trillion, most of it is held by the U.S. government itself. That’s money it owes to itself, along with pension funds and money owed to investors.
Kocherlakota says Americans shouldn’t worry too much about the national debt, and that it can actually be a sign of economic strength.
“It’s a sign of how much our country is valued. That our debt really serves as a way of storing money and savings for people around the world, in a way that is just not true of other country’s debt,” he said.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected]