U.S. Treasury Secretary Janet Yellen says America’s swelling national debt is manageable as long as it maintains its relativity to the rest of the economy.
CNBC reports that in a live “Squawk Box” interview on Thursday, Yellen also noted that high interest rates are adding to the burden as the U.S. manages its massive $34.7 trillion debt load.
“If the debt is stabilized relative to the size of the economy, we’re in a reasonable place,” she said.
“The way I look at it is that we should be looking at the real interest cost of the debt. That’s really what the burden is.”
During the 2024 fiscal year, net interest costs on the debt have totaled $601 billion — more than the government has spent on health care or defense and more than four times what it has laid out for education.
Multiple Congressional Budget Office reports have warned about the soaring costs of debt and deficits, cautioning that over the next decade the public share of the national debt — currently about $27.6 trillion — will hit a new record as a share of the total economy over the next decade.
Yellen touted President Joe Biden’s plans to manage the situation.
He has proposed $3 trillion of deficit reduction over the next decade,” she said. “That’s sufficient to basically keep the debt-to-income ratio stable, and this interest burden would be stabilized.”
