The US Debt Journey: Reaching Record Levels and Facing Potential Default in 2023

The United States (US) debt soared to US$31.46 trillion in real-time calculations on Tuesday (May 2, 2023). This is equivalent to Rp463,000 trillion.

As reported by *Katadata*, President Joe Biden and the Republican-controlled US House of Representatives are currently disputing the decision to raise the debt ceiling. House members want Biden to accept proposals for significant budget cuts in exchange for raising the debt ceiling.

However, the Biden administration insists that raising the debt ceiling, which allows the government to pay its obligations on time, should not be a bargaining chip.

Federal government borrowing has essentially reached the current debt limit of US$31.38 trillion. Although Treasury Secretary Janet Yellen says she can use various accounting maneuvers to delay a government default for several months.

(Read also: The Fed Raises Interest Rates Again in March 2023, US Banking Claimed to be Strong)

So, how has the US debt journey been year by year?

Data gleaned from the official US government website, Fiscal Data Treasury, shows that US government debt over the past 100 years has increased from US$408 billion (Rp6,000 trillion, exchange rate Rp14,705 per US dollar) in 1922 to US$30.93 trillion (Rp454,831 trillion) in fiscal year 2022.

*Databoks* traces the debt journey from 1980 to 2023, which shows a significant increase.

The increase in US debt year by year has increased by US$1-2 trillion. However, in 2019-2020, its debt increased by US$4 trillion.

In 2019, US debt was recorded at US$26.26 trillion (Rp386,158 trillion) and increased to US$30.73 trillion (Rp451,890 trillion).

During those 43 years, the US only experienced a decrease in debt three times. These were: 1980-1981, from US$3.21 trillion (Rp47,203 trillion) to US$3.18 trillion (Rp46,762 trillion); 1998-1999, from US$10.03 trillion (Rp147,493 trillion) to US$10 trillion (Rp147,052 trillion); and 2000-2001, from US$9.7 trillion (Rp142,640 trillion) to US$9.67 trillion (Rp142,199 trillion).

In its report, the government acknowledges that the US has been in debt since the beginning, especially during the American Revolutionary War on January 1, 1791. The debt continued to grow until it finally decreased in 1835 due to the sale of federal land and federal budget cuts.

Not only the Revolutionary War, but also the American Civil War and US involvement in World War I contributed to the swelling debt.

A large surge in debt also occurred due to the Afghanistan and Iraq wars, the Great Recession of 2008, and the Covid-19 pandemic.

"From FY (fiscal year) 2019 to FY 2021, spending increased by about 50%, largely due to the Covid-19 pandemic," wrote the US government.

In addition, tax cuts, stimulus programs, increased government spending, and decreased tax revenue due to widespread unemployment generally caused a sharp increase in national debt.

(Read also: How does the comparison of Indonesian government debt during the SBY and Jokowi eras look?)