US government debt is projected to skyrocket over the next decade as consumers cross an all-time high in debt accumulation.
Citing data from the New York Fed’s quarterly report on household debt and credit, business data provider Statista says that the total household debt skyrocketed to a historic high of $17.05 trillion in Q1 of 2023.
The “faster-than-usual” ascent in consumer debt is largely due to the surge in the volume of mortgage originations.
Fourteen million mortgages were refinanced during the height of the Covid-19 pandemic as consumers capitalized on low interest rates.
Mortgages account for 86% of the rise in total consumer debt since Q4 of 2019 as households converted $430 billion worth of housing equity into cash. Credit card debt accounts for 8% of the increase followed by student loans at 3%.
Meanwhile, Statista says that the gross national debt of the United States is now projected to climb to $51.99 trillion by 2033, an increase of more than $20 trillion from the current US debt of $31.92 trillion.
This month, President Joe Biden signed a deal that suspends the government’s debt ceiling, clearing the way for unfettered spending for the next two years.
According to the New York Times, the US government is expected to add about $1 trillion to the growing national debt by the end of September alone.
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