US national debt exceeds $34 trillion: How did we get here?

The US national debt has ballooned to over $34.1 trillion, as of February 2. Yahoo Finance Senior Columnist Rick Newman joins the Live show to explain who could be responsible for this gargantuan debt, citing various stimulus programs and legislation and how the 2024 presidential election will influence the United States' growing debt.

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Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

- The US national debt now hovering around $34.2 trillion as of February 2nd. Who's to blame for the rising debt?

RICK NEWMAN: So this is a big issue for a lot of voters. And there's some great analysis from the Committee for a Responsible Federal Budget. They helped us with this story.

Everybody's to blame. Both parties. CRFB finds that they did an analysis of all the debt that's been added on since 2001. And just to remind people, we had a federal surplus in 2001.

And the Congressional Budget Office back then said they thought the whole federal debt would be paid off by 2009. And so since that time, we've had a combination of tax cuts, spending hikes, the two wars, improvements to services such as Medicare. And that's where this gigantic national debt has come from.

So in the analysis that Sarah helped us with, 77% of all those actions whether it was legislation or something else were basically bipartisan. Only a small portion was either Republicans only or Democrats only. And as much as voters hate the fact that this debt is now getting out of control, guess what? Voters benefited from a lot of this.

And there generally is support for cutting taxes. I mean, everybody would rather pay less in taxes than more. And, you know, Americans have gotten a lot of tax cuts and hardly any tax hikes during the last 25 years. And they also benefit from changes to government programs such as the Medicare Part D, which included prescription drug coverage for the first time.

- Moving forward, not to put you on the spot here, but just in terms of the policies what we will likely see if Trump is elected versus if Biden is elected, is there a thought process, which would be worse or pretty much the same given the track record?

RICK NEWMAN: For the debt?

- Yeah.

RICK NEWMAN: All those selections are-- I mean, everything is as bad as it could possibly be because nobody wants to deal with this. But so Biden has a plan. He wants to raise taxes on the wealthy and on businesses.

But he couldn't get that done when his fellow Democrats controlled both houses of Congress for the first two years. Trump doesn't really have-- he doesn't really talk about doing anything about the debt. He famously called himself the king of debt.

And we know from the way he runs his businesses, that the more debt, the better. Let somebody else deal with it. And Trump has had bankruptcies.

So he has basically defaulted on debt. You can't do that at the federal level. The way this is going to play out is nobody is going to do anything about this, neither party until there's no other choice.

And for people who find despair in this situation, there is a way out. Like one simple fix would be a value added tax, which basically every other advanced country in the world has, everybody-- every country in Europe has a VAT. And that's like a federal sales tax.

And that would solve the problem. That would raise enough revenue to solve the problem. You could do other spending increases and benefit-- excuse me, spending cuts, and benefit, reductions slightly, reforms to Social Security.

There are a lot of ways to deal with this program. There's just no will to deal with it.

- Certainly. It's been this way for a while.

RICK NEWMAN: Familiar story. Nobody wants to do anything about it.

- All right, Rick, thanks so much for breaking that down for us.