According to data released by the US Treasury Department last week, in only 20 days, the US national debt surged by over $500 billion, reaching $33.5 trillion.

As of September 18th, the US Treasury reported the national debt stood at $33.04 trillion. Three months prior, it had stood at $32 trillion. The US debt ceiling, which had been set legally at $31.4 trillion, was surpassed in January of 2023.

The US economy’s total output was only $25.46 trillion, which would mean the economy would be required to expand by 33.5%, in order to be able to cover the national debt.

The Biden administration had been petitioning Congress to increase the limit since January. A bipartisan deal was ultimately reached and sent to the President’s desk, where it was signed on June 3rd. It lifted the debt limit until January of 2025, after the next Presidential election, allowing the United States to avert a debt default which would have proven economically disastrous.

It required weeks of fierce debate between Republicans and Democrats before a bipartisan bill to raise the limit was reached. The prolonged debate ignited fears in the market that the measure’s approval might be at risk, and that the Republican majority House might refuse to support the Fiscal Responsibility Act.

Had the government defaulted, the perception of unreliability surrounding its debt instruments would have limited its ability to borrow or pay its bills, which possibly could have triggered chaos overseas, impacting interest rates and mortgage rates in other countries as well.