Key Takeaways
- The US national debt surpassed $37 trillion in July 2025, increasing from $23 trillion in 2019.
- Interest payments on the debt are projected to exceed $1 trillion annually by 2028.
- Foreign ownership of US debt raises concerns about sensitivity to global market sentiment.
- Debt-to-GDP levels are forecasted to reach 96% by 2028, the highest since World War II.
- Rising Treasury yields may prompt investors to reallocate into inflation-protected assets and commodities.
The United States national debt has surpassed $37 trillion, a milestone that underscores mounting fiscal pressures and raises profound questions about long-term economic stability. This threshold, crossed in early July 2025 according to data from the US Treasury Department, signals accelerating borrowing amid persistent deficits, with potential ripple effects on interest rates, inflation, and global investor confidence.
The Rapid Ascent to $37 Trillion
Recent figures indicate that the total gross national debt stood at approximately $37.08 trillion as of early July 2025, marking a sharp increase from $23 trillion in 2019. This escalation reflects a combination of expansive fiscal policies, including stimulus measures and tax adjustments, which have driven deficits to exceed $1 trillion annually. Data from the Bipartisan Policy Center highlights that interest on the debt now ranks as the second-largest federal expenditure, consuming resources that could otherwise support infrastructure or social programmes.
The pace of this growth is particularly alarming. Over the past year, the debt has risen by an average of $5.13 billion per day, equivalent to roughly $59,335 per second, per calculations from the Joint Economic Committee. If this trajectory continues, projections suggest the debt could reach $38 trillion within months, amplifying concerns about sustainability.
Breakdown of the Debt Composition
Understanding the structure of this debt is crucial for assessing risks. As of August 2025, debt held by the public accounts for about $29.60 trillion, while intragovernmental holdings—such as Social Security trust funds—make up the remaining $7.33 trillion. Foreign investors own a significant portion, with Japan and China among the largest holders, though domestic entities, including mutual funds and pension plans, control the majority.
A report from Al Jazeera notes that the US holds the world’s highest national debt, with roughly a quarter owned by foreign entities. This international exposure means that shifts in global sentiment could influence Treasury yields, potentially increasing borrowing costs for the government.
Economic Implications and Risks
The ballooning debt carries multifaceted implications for the economy. Foremost among them is the burden of interest payments, which the Congressional Budget Office (CBO) estimates will exceed $1 trillion annually by 2028 under baseline scenarios. This figure could rise further if interest rates climb, as they have in response to inflationary pressures. Analyst sentiment from sources like Fortune, citing hedge fund manager Ray Dalio, warns of an “economic heart attack” if unchecked borrowing leads to a crisis of confidence.
From an investor perspective, this debt level heightens the risk of crowding out private investment. As the government issues more Treasuries to finance deficits, it competes with corporations for capital, potentially driving up borrowing costs across the board. The Penn Wharton Budget Model projects that under current policies, financial markets may not sustain accumulated deficits beyond the next 20 years without substantial reforms, assuming myopic expectations.
Inflation remains another key concern. With debt-to-GDP ratios approaching 100%—projected to hit 96% by 2028 per CBO estimates—the temptation for monetary policy to accommodate fiscal expansion could erode purchasing power. Historical precedents, such as post-World War II debt levels, suggest manageability through growth, but today’s environment of sluggish productivity and demographic shifts complicates this outlook.
Projections for 2025 and Beyond
Looking ahead, the CBO’s alternative scenario, which assumes the extension of policies like the Tax Cuts and Jobs Act beyond 2025, forecasts an additional $3.6 trillion in deficits over the 2018–2027 period compared to baseline. This could push debt held by the public to $29 trillion by 2028, representing 96% of GDP—the highest since World War II.
Analyst-led models from the Bipartisan Policy Center emphasise the need for bipartisan action, particularly with the debt limit reinstatement in January 2025 and tax policy expirations in December. Failure to address these could exacerbate volatility in bond markets, where yields on 10-year Treasuries have already shown sensitivity to fiscal news.
- Interest Cost Surge: Projected to become the largest budget item by the early 2030s, surpassing defence and Medicare.
- Growth Drag: Each percentage point increase in debt-to-GDP could reduce annual growth by 0.03%, per some econometric models.
- Currency Risks: A weakening dollar if foreign holders divest, though the greenback’s reserve status provides a buffer.
Investor Strategies Amid Fiscal Uncertainty
For investors, the $37 trillion milestone serves as a clarion call to diversify beyond US Treasuries. While these remain a safe haven, rising yields—evident in settled session data showing 10-year notes above 4% as of 11 August 2025—suggest opportunities in inflation-protected securities or commodities. Equity markets may face headwinds if higher rates compress valuations, particularly in growth sectors reliant on cheap capital.
Sentiment from professional sources, such as Fox News reporting on senatorial concerns, indicates growing alarm over fiscal irresponsibility. This could translate to policy shifts post-2025 elections, potentially including spending cuts or revenue enhancements, which might stabilise markets but introduce short-term pain.
Darkly amusing as it may seem, the debt clock’s relentless ticking—now at $108,551 per person—highlights a paradox: America’s ability to borrow stems from its economic dominance, yet this very strength risks being undermined by profligacy. Investors would do well to monitor upcoming budget debates, as they could dictate the trajectory of asset classes for years to come.
Key Debt Metrics as of August 2025
| Metric | Value | Source |
|---|---|---|
| Total Gross National Debt | $37.08 trillion | US Treasury Department |
| Debt Held by Public | $29.60 trillion | Joint Economic Committee |
| Intragovernmental Debt | $7.33 trillion | Joint Economic Committee |
| Debt per Person | $108,551 | Joint Economic Committee |
| Projected Debt-to-GDP (2028) | 96% | Congressional Budget Office |
In summary, the crossing of the $37 trillion debt threshold is not merely a numerical curiosity but a harbinger of tougher fiscal choices ahead. Without decisive action, the US risks a scenario where debt service crowds out productive spending, stifling growth and eroding its global standing. Investors attuned to these dynamics will position accordingly, balancing caution with opportunities in a high-debt world.
References
- Al Jazeera. (2025, May 20). The US has $36 trillion in debt: What does that mean and who owns it? https://www.aljazeera.com/news/2025/5/20/the-us-has-36-trillion-in-debt-what-does-that-mean-and-who-owns-it
- Bipartisan Policy Center. (n.d.). Deficit tracker. https://bipartisanpolicy.org/report/deficit-tracker/
- Bipartisan Policy Center. (n.d.). Spellings: National debt exceeds $36 trillion. https://bipartisanpolicy.org/press-release/spellings-national-debt-36-trillion/
- Bitget. (2025). US national debt milestone and fiscal reforms. https://www.bitget.com/news/detail/12560604904399
- Bitget. (2025). Debt exposure insights. https://www.bitget.com/news/detail/12560604904012
- Congressional Budget Office. (n.d.). Budget projections (baseline and alternative scenarios).
- Fortune. (2025, July 24). Ray Dalio warns of economic heart attack amid rising national debt. https://fortune.com/2025/07/24/ray-dalio-billionaire-economy-national-debt-economic-heart-attack-crisis/
- Fox Business. (n.d.). US National Debt Tracker. https://www.foxbusiness.com/economy/us-national-debt-tracker
- Fox News. (n.d.). Fetterman joins fiscal hawks to sound alarm as national debt nears $37T. https://www.foxnews.com/politics/fetterman-joins-fiscal-hawks-sound-alarm-national-debt-nears-staggering-37t
- Joint Economic Committee. (n.d.). Monthly debt update. https://www.jec.senate.gov/public/vendor/_accounts/JEC-R/debt/Monthly%20Debt%20Update.html
- Mind Math Money. (n.d.). US National Debt explained. https://www.mindmathmoney.com/articles/us-national-debt-explained-who-really-owns-americas-37-trillion-debt
- Penn Wharton Budget Model. (2023, October 6). When does federal debt reach unsustainable levels? https://budgetmodel.wharton.upenn.edu/issues/2023/10/6/when-does-federal-debt-reach-unsustainable-levels
- Tekedia. (n.d.). National debt milestone and need for fiscal discipline. https://www.tekedia.com/the-u-s-37-trillion-national-debt-milestone-signals-a-critical-need-for-fiscal-discipline-and-reforms/
- US Treasury Department. (n.d.). America’s finance guide: National debt. https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
- US House Budget Committee. (n.d.). The consequences of debt. https://budget.house.gov/press-release/the-consequences-of-debt
- Voice Lapaas. (n.d.). Fiscal risks of the $37 trillion US national debt. https://voice.lapaas.com/us-national-debt-37-trillion-fiscal-risks/
- Wikipedia. (n.d.). National debt of the United States. https://en.wikipedia.org/wiki/National_debt_of_the_United_States
- News-Pravda. (2025, August 9). Global fiscal overview. https://news-pravda.com/world/2025/08/09/1581403.html
- News-Pravda. (2025, August 9). Policy implications analysis. https://news-pravda.com/world/2025/08/09/1581000.html
- USA News-Pravda. (2025, August 9). Borrowing costs and fiscal trajectory. https://usa.news-pravda.com/world/2025/08/09/413121.html
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