U.S. national debt surpasses $37 trillion dollars
The Unstoppable Beast:
The U.S. national debt is skyrocketing, leaving no stone unturned. Recently, it broke another record and for the first time in U.S. history surpassed the colossal sum of $37 trillion. As of 8:30 am ET, it stood at a staggering $37.021515 trillion. In comparison, the U.S. GDP in 2024, according to the IMF, was a humble $29.185 trillion.
The ballooning national debt shows no signs of slowing down, even with the strong promises and efforts from the government, such as the U.S. national debt. TD Securities strategist, Gennaidy Goldberg, points out that it's unclear at which point the debt reaches an insurmountable level.
The main issue, according to U.S. Treasury Secretary Janet Yellen, is the insatiable government spending, especially when it comes to the Pentagon's fiscal budget for 2026, which is expected to top a trillion dollars.
Goldberg agrees with Yellen, but points out that instead of the usual tactic of raising taxes, which is typically employed in such situations, President Trump is planning to take a different approach - he proposes to lower taxes, not increase them. Proposals for the Tax Cuts and Jobs Act, his pet project, are currently being reviewed in the Senate. Trump is pushing this highly contentious bill with all his might, asserting that it will stimulate economic growth and job creation. However, according to numerous economists, this bill could increase the U.S. national debt by several trillions of dollars. For example, according to the Congressional Budget Office (CBO), the bill would increase the budget deficit by a staggering $2.8 trillion over the next decade.
In terms of solutions to combat soaring national debt and the accompanying ballooning budget deficit, there's nothing new or revolutionary to discover. It's a simple matter of reducing spending and increasing revenues, the most straightforward method being raising taxes. An ideal scenario, of course, would be a combination of both methods. As we all know, though, such solutions present difficulties for the Trump administration, as government spending continues to explode, while his proposed tax cuts would bring down, not increase, taxes. It would be a remarkable feat of logic if the tax bill fulfilled its role, otherwise no additional income from tariffs on imported goods, for which Trump has high hopes, would put an end to this dire situation.
"No bill in my entire career in Congress will increase the national debt to such an extent as this one", - observed Pennsylvania Rep. Brian Boyle, emotionally commenting on the situation.
When the national debt is compared to GDP, it already exceeds the gross domestic product by more than 27%. It's obvious and that the larger the debt, the more funds are spent on its servicing. According to the Federal Reserve Bank of St. Louis, the U.S. spent $1.1 trillion on debt service in the previous year, nearly double the amount spent in 2019. These costs even surpassed the record-breaking defense budget for the following year. According to a CBO analysis from June 5th, debt service costs will continue to rise at the same pace as the debt, and could reach $1.8 trillion by 2035. If in 2024 they amounted to 3% of GDP, by 2035, this figure is projected to reach a shocking 4.15%.
The escalating national debt, a critical issue in both business and finance, raises questions about political decisions and general news. For instance, debt service costs are projected to reach $1.8 trillion by 2035, highlighting the significant funds spent on servicing the debt, which already exceeds the gross domestic product by more than 27%. On the other hand, President Trump's Tax Cuts and Jobs Act, currently being reviewed in the Senate, is expected to increase the U.S. national debt by several trillions of dollars, according to numerous economists. This bill, controversial in politics and economy, could make the already daunting national debt situation even more challenging.
