US national debt hits record high: Why it's hard to bring down

The US national debt has surpassed a record $34 trillion, just three months after the debt first reached $33 trillion.

In the video above, Yahoo Finance Senior Columnist Rick Newman discusses risks associated with the nation's exploding debt as a fiscal showdown looms.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

Transcripción del video

SEANA SMITH: Well, US debt topping over $34 trillion for the first time ever, this coming as a deadline looms for Congress to reach a deal in order to avert a government shutdown. Yahoo Finance Reporter Rick Newman is here. And Rick, when you take into account the skyrocketing national debt that we have, pretty disappointing, concerning here at this point, yet voters don't seem to care.

RICK NEWMAN: Well, voters care in theory. Polls say that if you ask voters, is the national debt too high? Yes, it's too high. And just qualitatively, I mean, they sure complain about it when they write to me if I'm doing something on a related topic.

But what voters don't want is the painful choices that would come with the solution. I mean, getting out of this problem means you either have to raise taxes or cut spending and not cut spending by trivial numbers, such as cancel some art spending or something like that. You have to take on the big programs where the money is. And that is Social Security, Medicare, Medicaid, and defense.

And so if you say to just about any voter, how do you feel about cutting Social Security? No way, don't do that. What about cutting Medicare for seniors or health care for poor people? No, we don't think that's a great idea either. What about raising taxes? Well, fine if you raise somebody else's taxes. Just don't raise my taxes.

And you know, the ability of the United States to borrow seemingly endlessly has gotten us into this problem. So it's no surprise at all we hit $34 trillion. We're gonna hit $35 trillion probably later this year. And by the time the next president is out of office, we're gonna hit $40 trillion in national debt.

SEANA SMITH: So, Rick, given all this and given the fact that we do have a deadline coming up here in what, less than two weeks at this point that the government could potentially shut down if a deal is not reached on future funding, on future spending, what's your best guess, I guess, at this point just in terms of where talks stand and how likely we are to get some sort of deal before that first deadline?

RICK NEWMAN: We don't really seem any closer than we have been going back to when Republicans fired Kevin McCarthy as their speaker. Kevin McCarthy has now left Congress. He's not even around on Capitol Hill anymore. And there's no evidence that we've gotten any closer toward any kind of deal.

So the Republicans are basically demanding these fairly sharp spending cuts that Democrats who control the Senate are unlikely to agree with. So I mean, in normal times, there would just be a compromise.

You know, the House Republicans would get some of the cuts they want. And they would not get other things they want. And the Democrats who control the Senate would get some of the things they want, such as more funding for Ukraine for the war there where that funding has run out.

It's just an open question with basically in the house you have a fairly small number of the most extreme conservative Republicans who seem to have control of the party. And this new Speaker Mike Johnson comes from that wing of the party. So it's gonna be quite interesting to see how this all plays out.

I mean, I don't think there's really a template for this. I mean, a lot of times we know how Congress comes together to make a deal but not when an extreme faction of one party seems to control the whole party. So I'm very interested to see how Republicans get out of this cul-de-sac.

SEANA SMITH: Yeah, of course. And then, Rick, there's also the slight issue that Congress is only gonna be in session for what, just over a week before this deadline too. So the fact that they're so far apart, the fact that there is so much disagreement within the Republican Party in the house doesn't make it too likely. But we'll see. Maybe we'll be pleasantly surprised. Rick Newman, thanks so much.