US Debt Growing Fast, Experts Say It's a Problem

A new report shows the U.S. national debt is growing quickly and could reach $38 trillion. Experts are worried this is too much debt and could cause problems later. They say leaders need to fix this soon.
By Newsroom | Economy, United States |

The Congressional Budget Office (CBO) has released a report projecting that U.S. federal deficits and debt will continue to grow significantly over the next decade. This trend is fueled by increasing interest costs on the national debt, which has surpassed $38 trillion. Experts warn that this trajectory is "unsustainable" and could lead to a fiscal crisis if not addressed by lawmakers.

Looming Fiscal Challenges

The United States faces a worsening fiscal outlook, with the national debt nearing $38 trillion. The Congressional Budget Office (CBO) has issued a stark warning: federal deficits and the national debt are projected to increase over the coming decade. This assessment represents a modest deterioration compared to previous analyses, incorporating significant events from the past year.

Key developments shaping this outlook include:

  • The passage of a Republican tax and spending bill referred to as the "One Big Beautiful Bill Act."

  • The implementation of higher tariffs.

  • An immigration crackdown, which includes the deportation of millions of immigrants.

Rising Debt Service Costs

A major driver of the growing deficit is the substantial increase in net interest costs on the national debt. In fiscal year 2025, these costs are estimated to have surpassed $1 trillion for the first time in U.S. history. This surge in debt servicing is attributed to:

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  • Higher average benefit payments following recent cost-of-living adjustments.

  • An increasing number of beneficiaries due to the aging U.S. population.

This situation has prompted warnings from various financial experts and organizations. Michael Peterson, CEO of the Peterson Foundation, described the CBO's projection as an "urgent warning" about the nation's "costly fiscal path."

Impact on Future Growth and Stability

The consequences of mounting debt and deficits are far-reaching. Repaying investors for borrowed money can crowd out government spending on essential areas such as infrastructure, education, and social programs. These investments are crucial for enabling future economic growth.

  • Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center, stated that "large deficits are unprecedented for a growing, peacetime economy." He stressed that while there is still time to "correct course," policymakers must act.

  • Burks urged lawmakers to collaborate on options for increasing revenue, reducing spending, and managing major cost drivers to prevent more painful choices in the future.

Policy and Market Reactions

The CBO's projections are gaining attention from various stakeholders:

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  • Voters in an election year are reportedly connecting rising debt to their personal economic well-being.

  • Financial markets are closely observing the situation.

  • Private sector leaders, including Jamie Dimon (JPMorgan CEO), Ray Dalio (Bridgewater Associates founder), and Ken Griffin (Citadel CEO), have voiced concerns about government debt.

Some political figures have proposed unconventional solutions. For instance, Donald Trump has suggested that selling "gold visas" could generate significant revenue, potentially up to $15 trillion, which could be earmarked for deficit reduction. However, the feasibility of such proposals is questioned.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, has characterized the nation's debt and spending as "unsustainable" and called for action on entitlement reform and the restoration of fiscal discipline.

Broader Economic Indicators

Beyond debt and deficits, the CBO report also touches upon other economic metrics:

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  • Inflation is not projected to reach the Federal Reserve's 2% target rate until 2030.

  • The CBO's latest report does not account for potential changes to debt and deficits stemming from proposed large fiscal legislative packages, which are expected to add trillions to the deficit.

Expert Analysis

"Large deficits are unprecedented for a growing, peacetime economy. The good news is there is still time for policymakers to correct course. We encourage lawmakers to work together to explore options for raising revenue, trimming spending, and slowing the growth of the major cost drivers. Congress and the administration should seize the opportunity to act now before the available menu of choices becomes much more painful."— Jonathan Burks, Executive Vice President of Economic and Health Policy, Bipartisan Policy Center

"This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching."— Michael Peterson, CEO, Peterson Foundation

"The nation’s $38 trillion debt and rising spending are ‘unsustainable,’ urging lawmakers to address entitlement reform and restore fiscal discipline."— Maya MacGuineas, President, Committee for a Responsible Federal Budget

Conclusion and Implications

The CBO's latest report underscores a critical fiscal challenge for the United States. The projected rise in deficits and national debt, driven largely by increasing interest payments, signals a potentially unsustainable path. While current debt levels and deficit spending occur during a period of economic growth, experts warn that this is an anomaly. The report highlights the risk of slowed economic growth, increased vulnerability to interest rate hikes, and a heightened possibility of a fiscal crisis.

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Immediate implications include:

  • Potential for reduced government spending on vital public services and investments.

  • Increased financial pressure on future administrations and taxpayers.

  • Continued scrutiny from financial markets and international observers.

The call for bipartisan action to address revenue, spending, and cost drivers remains a central theme. The opportunity to implement less painful solutions is seen as diminishing, emphasizing the urgency for lawmakers to engage with the fiscal challenges ahead.

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Frequently Asked Questions

Q: How much is the US debt?
The national debt is close to $38 trillion.
Q: Why is the debt growing?
It is growing because the government is spending more than it earns, and the cost to pay interest on the debt is very high.
Q: What could happen if the debt keeps growing?
It could make it harder for the government to pay for important things like schools and roads, and it might hurt the economy in the future.
Q: What do experts say should be done?
Experts say leaders need to work together to spend less, earn more, and control the costs that are making the debt grow.