U.S. National Debt Surges Past $37 Trillion Amid Soaring Spending and Rising Interest Costs


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by Emmitt Barry, with reporting from Washington D.C. Bureau Staff

(Worthy News) – The U.S. government’s gross national debt has surpassed $37 trillion for the first time in history, according to Treasury Department figures released Tuesday, marking a critical fiscal milestone years earlier than originally forecast by the Congressional Budget Office (CBO).

The CBO had projected in January 2020 that the national debt would not reach $37 trillion until after fiscal year 2030. However, the COVID-19 pandemic and a series of massive federal stimulus packages—initiated under President Donald Trump and continued under former President Joe Biden—accelerated government borrowing at an unprecedented rate.

Compounding the situation, a tax cut and spending package signed into law by President Trump earlier this year is expected to add an estimated $4.1 trillion to the debt over the next decade, according to CBO calculations.

Michael Peterson, chairman and CEO of the Peter G. Peterson Foundation, sounded the alarm: “Rising debt adds costs for everyone and reduces private sector investment. Within the federal budget, the debt crowds out important priorities and creates a damaging cycle of more borrowing, more interest costs, and even more borrowing.”

Americans are already experiencing the consequences, with the Government Accountability Office reporting increased mortgage and auto loan rates, stagnating wages due to decreased business investment, and inflationary pressures across consumer goods.

Brookings Institution senior fellow Wendy Edelberg warned that current fiscal policies ensure that borrowing will continue at high levels into the next presidential term: “We’re going to borrow a lot over the course of 2026 and 2027, and it’s just going to keep going.”

The pace of debt accumulation has accelerated dramatically: the U.S. debt hit $34 trillion in January 2024, rose to $35 trillion in July, $36 trillion in November, and now $37 trillion just months later. Peterson noted, “We are now adding a trillion more to the national debt every five months. That’s more than twice the average pace over the past 25 years.”

The Joint Economic Committee projects that at this rate, the U.S. will reach $38 trillion in just under six months. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, called for urgent reform: “Hopefully this milestone is enough to wake up policymakers to the reality that we need to do something, and we need to do it quickly.”

The budget deficit also expanded sharply in July, climbing to $291 billion despite record-high tariff collections. Monthly federal outlays soared to $630 billion, driven largely by rising interest costs and increased program spending. Meanwhile, revenues failed to keep pace.

Tariff revenues, a product of Trump’s trade policy, surged to over $28 billion in July alone, exceeding the previous record from June. Year-to-date collections have now topped $154 billion, buoyed by a baseline 10% tariff and additional duties of up to 40% on key imports. Treasury Secretary Scott Bessent projects that total tariff receipts could reach $300 billion by year’s end.

Economists remain divided over the impact of tariffs. Goldman Sachs analysts warned this week that consumers are increasingly bearing the costs, estimating that they now absorb about 22% of the tariffs’ burden, a figure that could rise to two-thirds by year’s end. President Trump dismissed this analysis, insisting in a Truth Social post that foreign exporters remain the primary payers and touting the tariffs’ revenue and market gains.

Tesla CEO Elon Musk, the world’s richest man, warned last month that the U.S. is nearing “de facto bankruptcy” as interest payments now consume roughly 25% of all federal tax revenue. “If this continues, America goes de facto bankrupt and all tax revenue will go to paying interest on the national debt with nothing left for anything else,” Musk posted on X.

For the first 10 months of the fiscal year, the U.S. has run a $1.63 trillion deficit—7% higher than the same period last year. With both spending and revenues hitting record highs, experts say the U.S. is entering uncharted economic territory, with long-term stability increasingly uncertain.

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