On December 29, 2023, the U.S. government’s “total public debt outstanding” (the national debt) surpassed the $34 trillion mark for the first time, according to a report released by the Treasury Department on January 2, the first business day of 2024. This enormous figure represents the total amount borrowed by the federal government that remains outstanding or unpaid over the entire history of the U.S.

Each year that the government spends more money than it brings in via tax revenues, otherwise called “deficit spending,” it must borrow more money—typically in the form of bond sales—to make up the difference, and the national debt grows. And just like any financed debt, interest accumulates, substantially adding to America’s burdensome bill.

Historically, presidents have taken the blame for inflating—or credit for reducing—the national debt, and the Executive Office significantly influences the same. Still, the actual power of the U.S. purse is firmly in the hands of Congress, which must approve all federal government spending.

America has possessed a national debt since before its first national election. George Washington’s administration inherited a debt of just over $71 million, which fluctuated until Andrew Jackson nearly eliminated it during his eight years in office. Jackson inherited a $58 million debt, bringing it down by over 99 percent to just under $337,000 when he left office in 1837.

The national debt has been on the rise ever since, crossing the billion-dollar mark during the Lincoln presidency and passing the trillion-dollar threshold under Ronald Reagan. The last president to witness a debt decrease was Calvin Coolidge, who left office in 1929, just before the country plunged into the Great Depression.

The greatest dollar-amount-increase occurred during the eight years of the Obama administration, with over $8 trillion added, while Donald Trump presided over nearly the same increase in only four years. Under Joe Biden, the administration has seen an almost $5.5 trillion increase in its first three years. Still, there are no signs of slowing the spending that necessitates more borrowing as the country struggles to avoid another severe recession or worse.

So, how did we get here?

Until 1971, the U.S. government—by design—was constrained to borrow and spend based mainly on the amount of gold it kept in reserve. Though the Congressional and Executive branches constantly pushed the envelope to spend more, the “gold standard” imposed a definite fiscal discipline to which the government had to adhere to prevent economic and political catastrophe. The money supply could only grow per the value of U.S.-held gold.

However, in August 1971, with the economy reeling from rampant spending on new “Great Society” social programs and the Vietnam War, President Nixon unpegged the U.S. dollar (USD) from the gold standard, preventing foreign banks from exchanging the dollars they held (from purchasing U.S. bonds) for gold in the U.S. reserve. With the dollar severed from gold, the USD was now a “fiat currency,” meaning the Federal Reserve’s central bank could print or issue as many dollars as the government needed to fund its endless expansion, selling debt to foreign banks based solely on the “full faith and credit of the United States government,” with no need to redeem any of its gold reserves.

Nixon announced his new monetary policy as temporary. Still, it was soon clear there would be no going back to the gold standard since Congress could promise endlessly and spend virtually as much money as it desired. The national debt has been spiraling out of control ever since, gaining a frightening momentum since the War on Terror following 9/11, the great recession of 2008-2009, the green transition from fossil fuels, and the ruinous damage wreaked by the foolish governmental response to COVID-19.

Although conservative economists have long predicted a catastrophic collapse of the USD (and the economy it undergirds), America has so far avoided such a catastrophe. However, as the debt balloons and interest rates rise to fight the inflation caused by issuing too much money—incurring too much debt—interest payments alone are now costing the government about $2 billion a day. Absent drastic fiscal restraint, these interest payments will soon surpass the monies spent each year on defense.

With the cost of credit rising, American business is suffering. From Ellen Schneider’s article, “Private US Companies Increasingly Going Bust as Profit Shrinks,” published by Bloomberg News on January 8, “Private U.S. companies are seeing their earnings and profit margins collapse after the Federal Reserve’s rate hikes have lifted financing costs, and are increasingly going broke, according to a new report.”

Major corporations like Amazon, Citigroup, Blackrock, Google, and hundreds more began laying off workers in 2023 while announcing even deeper cuts in 2024. In the meantime, bankruptcies for small- to medium-sized businesses (and individuals) continue to rise. According to an article, “US bankruptcies surged 18% in 2023 and seen rising again in 2024—report, published on January 3 by Reuters: “Total bankruptcy filings—encompassing commercial and personal insolvencies—rose to 445,186 last year from 378,390 in 2022, according to data from bankruptcy data provider Epiq AACER.”

In the same article, Michael Hunter, vice president of Epiq AACER, added:

We expect the increase in [the] number of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt.

Quoting from “US national debt hits record $34 trillion as Congress gears up for funding fight,” written by Fatima Hussein and Josh Boak and published by the Associated Press on January 2:

“So far, Washington has been spending money as if we had unlimited resources,” said Sung Won Sohn, an economics professor at Loyola Marymount University. “But the bottom line is there is no free lunch,” he said, “and I think the outlook is pretty grim.” . . .

“Looking ahead, debt will continue to skyrocket as the Treasury expects to borrow nearly $1 trillion more by the end of March,” said Peterson Foundation CEO Michael Peterson. “Adding trillion after trillion in debt, year after year, should be a flashing red warning sign to any policymaker who cares about the future of our country.” . . .

When it could turn into a more dire situation is anyone’s guess, says Shai Akabas, director of economic policy at the Bipartisan Policy Center, “but if and when that happens, it could mean very significant consequences that occur very quickly.”

Once upon a time, America’s economic infrastructure was the world’s envy, and her vast riches blessed all nations. And while the modern American ethic detaches itself from Christian precepts, the nation’s origins reflected a strong reverence for God and the bounties received as a result of His gracious blessings for Abraham and his descendants (Genesis 12:1-3; 13:14-17; 15:1-21; 17:1-7; 22:17-18).

Sadly, American leaders and citizens continue to turn steadily away from their Creator and find themselves drowning in a deluge of red ink and standing on the brink of unprecedented economic disaster. While no one can predict the exact timing, without repentance and immediate fiscal restraint, America’s death by debt approaches. The once proud leader of the world may soon succumb to those who hold the bill (Proverbs 22:7).