Americans shouldn’t forget their country owes the biggest debt in history, warns the outgoing US Federal Reserve chair Janet Yellen.
“I would simply say that I am very worried about the sustainability of the US debt trajectory. Our current debt-to-GDP ratio of about 75 percent is not frightening, but it’s also not low,” Yellen said.
“It’s the type of thing that should keep people awake at night,” she added.
US debt now stands at $ 20.6 trillion and rising. Of that total, $ 14.9 trillion is owed by the public. It is the highest level of public debt since World War II.
The Congressional Budget Office (CBO) predicted that if current laws stand, widening budget deficits will increase the debt sharply in the next 30 years. The deficit would reach 150 percent of GDP by 2047.
Yellen’s comments come at a time the US Republican party is proposing a tax reform plan that would cost the budget $ 1.5 trillion.
The US Democrats have been criticizing President Donald Trump, warning about the growing debt. However, the debt almost doubled under the administration of Democrat Barack Obama.
According to USDebtclock.org, when Obama entered the Oval office in 2008, the national debt stood at $ 10.7 trillion. It increased 86 percent to almost $ 20 trillion when he left.
However, the total US debt, which is the combination of government, business, mortgage, and consumer debt is approaching $ 70 trillion. It was $ 2.2 trillion less than fifty years ago.