Threatening the future economic stability of every citizen and the nation as a whole, America’s national debt has surged to $36 trillion.
Currently, the fastest-growing federal expense is interest payments, which are projected to reach $13.8 trillion over the next decade.
The debt-to-GDP ratio now exceeds 120%, prompting a credit rating downgrade in 2023.
The situation raises serious concerns about reduced business investment, higher interest rates, and the sustainability of vital programs like Social Security and Medicare.
The national debt represents the total amount the U.S. government owes to its creditors, both domestic and foreign.
This massive financial obligation has become a central concern in economic and political discussions, particularly as it continues to grow at a rapid pace.
While government borrowing serves important purposes, its quick expansion raises serious questions about America’s fiscal future.
The concept of national debt dates back to the founding of the United States.
Alexander Hamilton, the first Treasury Secretary, established the foundation for federal borrowing to finance the young nation.
As he noted, “The necessity for borrowing in particular emergencies cannot be doubted, so on the other, it is equally evident that, to be able to borrow upon good terms, it is essential that the credit of the nation should be well established.”
Throughout American history, the national debt has fluctuated in response to major events.
Wars, economic downturns, and national emergencies have traditionally caused significant increases.
The debt rose sharply during the Revolutionary War, Civil War, and both World Wars.
More recently, the 2008 financial crisis and the COVID-19 pandemic triggered enormous spending increases that substantially added to the debt burden.
As of May 2025, the national debt stood at over $36 trillion, with a debt-to-GDP ratio of about 124%.
This means the debt now exceeds the annual economic output of the entire country.
The debt-to-GDP ratio surpassed 100% in 2013, a threshold that many economists view as a warning sign of fiscal health.
Fitch Ratings, one of the major credit rating agencies, downgraded the U.S. credit rating from AAA to AA+ in August 2023, citing the high government debt burden and erosion of governance.
This marked the second time in history that the U.S. lost its top-tier credit rating, following a similar downgrade by Standard & Poor’s in 2011.
The national debt consists of various securities issued by the U.S. Treasury, including Treasury bills (with maturities of less than one year), Treasury notes (1-10 years), Treasury bonds (10-30 years), Treasury Inflation-Protected Securities (TIPS), and others.
These securities are considered among the safest investments globally, which has historically allowed the U.S. to borrow at relatively low interest rates.
The debt is divided into two main categories. Debt held by the public includes securities owned by individuals, corporations, the Federal Reserve, and foreign governments.
Intragovernmental holdings represent debt that one part of the government owes to another, primarily Social Security and Medicare trust funds. Together, these components make up the total national debt.
Data from the Congressional Budget Office asserts:
“Encouragingly, the debt held by the public as a share of the economy (the measure that economists look at) will stabilize over the next few years – albeit at elevated levels – due to a combination of a recovering economy and several deficit reduction measures.”
Despite this short-term stabilization, long-term projections remain concerning. Several structural factors drive this persistent growth.
An aging population means that more Americans will collect Social Security and Medicare benefits, while fewer workers will pay into these systems.
Healthcare costs continue rising faster than general inflation. Additionally, the current tax system does not generate enough revenue to cover federal spending.
Interest payments on the debt present a particularly troubling trend. As the debt grows and interest rates rise, these payments consume an increasing portion of the federal budget.
The Peter G. Peterson Foundation projects interest costs will total $13.8 trillion over the next decade, making them the fastest-growing part of federal spending.
This creates a vicious cycle where more borrowing leads to more interest, which requires more borrowing.
Former Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, highlighted the security implications of this situation when he stated.
“The most significant threat to our national security is our debt,” he warned.
High debt levels can constrain defense spending and limit America’s ability to respond to international challenges, potentially undermining global leadership and influence.
The economic consequences of high debt extend beyond government finances.
High federal borrowing can lead to higher interest rates throughout the economy, making mortgages, car loans, credit cards, and business loans more expensive for everyone.
This “crowding out” effect occurs when government borrowing competes with private sector investment for available funds, reducing business expansion and job creation.
Economic growth may also suffer under heavy debt burdens. Research suggests that countries with debt-to-GDP ratios above 90% typically experience slower growth.
The Congressional Budget Office estimates that if federal borrowing were reduced, income per person could increase by $6,300 (in today’s dollars) by 2050 compared to current projections.
The national debt represents an intergenerational transfer of financial obligations. Today’s borrowing creates expenses that future taxpayers must cover.
This raises important ethical questions about fiscal responsibility and fairness across generations.
As Benjamin Franklin wisely advised, “Rather go to bed without dinner than to rise in debt.”
Both major political parties have contributed to debt growth over time, though they often propose different solutions.
Since 2000, the debt has increased significantly under both Republican and Democrat administrations.
Debt increased under Presidents George W. Bush ($5.85 trillion), Barack Obama ($8.34 trillion), Donald Trump ($7.8 trillion), and Joe Biden ($6.64 trillion through 2024).
Looking internationally, the United States is not alone in facing debt challenges.
Japan had the highest debt-to-GDP ratio globally at 243% in 2022, with Greece at 177% and Italy at 146%.
The U.S. ranked fourth, ahead of major economies like France, the United Kingdom, and Germany.
Different economic perspectives offer contrasting views on the significance of debt.
Traditional economists warn about the dangers of excessive debt, while proponents of Modern Monetary Theory (MMT) argue that sovereign governments that issue their own currency can print money as needed without necessarily facing insolvency.
However, even MMT acknowledges limits related to inflation and resource constraints.
The fiscal outlook appears challenging. The Congressional Budget Office projects trillion-dollar deficits will continue, with a cumulative deficit of $21.8 trillion from 2026 to 2035.
Without policy changes, the debt will likely continue growing faster than the economy, pushing the debt-to-GDP ratio to unprecedented levels.
Rising debt threatens essential safety net programs. The Medicare Hospital Insurance Trust Fund is projected to be depleted by 2031.
Meanwhile, the Social Security Trust Fund is expected to be depleted by 2035. Without reforms, these critical programs could face significant reductions in benefits.
Public concern about the debt crosses political lines. Nearly 75% of voters consider addressing the national debt a top priority, according to polling by the Peter G. Peterson Foundation.
This suggests potential for bipartisan solutions, though reaching an agreement on specific policies remains challenging.
Economists generally agree that acting sooner rather than later would require smaller, more gradual policy changes and would reduce long-term economic risks.
The longer reforms are delayed, the more drastic and potentially disruptive they will need to be.
This creates what many call a “fiscal cliff” scenario, where sudden, harsh adjustments become necessary.
Solutions typically involve some combination of spending reductions, revenue increases, and economic growth policies.
Specific approaches vary widely based on political and economic perspectives.
Thorough reform might include changes to tax policies, adjustments to entitlement programs, defense spending reviews, and targeted investments to boost economic productivity.
While the national debt enables the government to fund important programs and services when revenues are insufficient, the current trajectory raises serious concerns.
Addressing these challenges will require difficult choices, bipartisan cooperation, and a commitment to fiscal sustainability.
Understanding the national debt is essential for all Americans. The decisions made about government borrowing, spending, and taxation affect everyone’s economic opportunities, financial security, and the nation’s ability to respond to future challenges.
By recognizing the importance of fiscal responsibility, voters and policymakers can work together to find solutions that balance current needs with long-term sustainability.
The stakes are high. Left unaddressed, the growing debt threatens to undermine economic growth, reduce living standards, and constrain policy options for addressing future national priorities.
However, with thoughtful reforms and a commitment to fiscal responsibility, these challenges can be met while preserving essential government functions and protecting vulnerable populations.
The path forward requires informed public engagement and political leadership willing to make difficult but necessary choices.
