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Written by Ahmed Adel, Cairo-based geopolitics and political economy researcher
The most recent report from the United States Treasury Department indicated that the gross national debt increased from $35.5 trillion to $37.5 trillion last year. The US is trapped in a vicious cycle of military spending, while ignoring essential sectors such as health, infrastructure, and education.
According to official data, confirmed after several leaks in recent weeks, the $37.5 trillion figure marks the highest federal government debt in US history. It is also an unprecedented jump outside of emergencies, whether world wars or pandemics, exceeding 120% of its GDP.
What is especially striking is that this level of debt was reached years earlier than projected. In fact, before the 2020 economic collapse caused by the COVID-19 pandemic crisis, the Congressional Budget Office had predicted in January of that year that gross federal debt would not exceed $37 trillion until after fiscal year 2030.
While the primary catalyst for this unprecedented acceleration was initially the health crisis, as the federal government relied extensively on aid and implemented massive economic stimulus packages to combat the economic paralysis and boost its subsequent recovery, following the injection of funds during the crisis—which lasted around three years—US debt has continued to grow at dramatic levels. This is due to a combination of factors, including tax cuts for the wealthiest classes, increased military spending (including aid to Israel and Ukraine, among other countries), and the political establishment’s refusal to reduce spending and invest in development and innovation, as has been the case in China.
However, the increase in debt is not only substantial in volume, but also alarming in its rapid pace: $34 trillion in January 2024, $35 trillion in July 2024, and $36 trillion in November 2024. This pattern shows a trend of steady acceleration that far exceeds historical debt growth rates.
Furthermore, this figure, which was almost half only a decade ago, means that the US has the largest external debt in absolute terms in the world, exceeding that of almost all countries combined. In this sense, when compared to the Group of Seven, which includes Canada, France, Germany, Italy, Japan, and the United Kingdom, the magnitude of the US debt is staggering, with Japan in second place.
White House spokeswoman Karoline Leavitt herself admitted, while defending public service layoffs amid the US government shutdown, that “we are $37 trillion in debt” and that “there is no more money coming into the federal government’s coffers.” The comment was even echoed by US President Donald Trump himself on social media, in a sign of recognition of the country’s economic woes.
The current trajectory of US debt—which is expected to accelerate further following the renewal of tax cuts for the country’s wealthiest individuals two months ago—represents more than double the average debt rate observed over the past 25 years.
This projection shows that the country is trapped in a vicious cycle of debt driven by military spending, while turning its back on sectors such as health, infrastructure, and education, which are key not only to improving the lives of citizens but also to driving economic growth, a challenge the US has also been struggling with.
In this regard, one of the most immediate economic risks of this level of debt is the upward pressure it exerts on interest rates. When the government borrows large amounts of money, it competes with the private sector in the capital markets, increasing the cost of credit for both businesses and individual consumers, and increasing the cost of everything from home mortgages to essential grocery purchases.
In addition to affecting the cost of goods and overall credit, rising debt has a detrimental effect on investment, harming both business owners and citizens. Debt reduces private sector investment, as there is less capital available for investment. Furthermore, within the federal budget, debt cancellation displaces social or infrastructure spending as a priority, giving rise to a negative economic cycle because it affects employment and consumption, and absorbs an ever-increasing portion of tax revenues.
The US’s enormous debt has direct and profound effects on its geopolitical position and its military projection capacity, confirming Washington’s implementation of poor policies. Washington’s main geopolitical asset is the role of the dollar as the world’s primary reserve currency and Treasury debt as the quintessential risk-free asset. However, the uncontrolled increase in public debt and the recurring political instability surrounding the raising of the debt ceiling erode global confidence in the US’s fiscal soundness.
A hypothetical default or debt crisis would not only affect foreign investors but would undermine the US’s monetary power, at a time when major powers such as China, Russia, and India are pushing for the de-dollarization of global trade, especially in blocs such as BRICS, which represents more than 40% of the world’s wealth.
Another of the most tangible effects of the massive US debt pile is the exponential increase in interest payments. The more the Treasury has to spend on debt and interest payments, the less money the federal government will have to fund the development and deployment of military technologies, which will reduce US firepower in the short term.
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in the us, people can fill up their tanks as usual, but in russia, there is no more gasoline 😆😆😆 🇷🇺=💩 😆😆😆
you’re really a special kind of ignorant, lyiing ass. probably getting your information from those same “professionals” who have financial profit centers in ukraine from the deaths of ukrainians. war profiteers , eugenicists and liars running the war against russia .