U.S. national debt has surpassed $37 trillion for the first time in history. The debt has surged as policymakers increased government spending and implemented stimulus measures.
Head of U.S. rates strategy at TD Securities, Gennadiy Goldberg, said that the crux of the $37 trillion problem is that no one knows at what level the debt becomes unsustainable. Treasury Secretary Scott Bessent acknowledged that the U.S. government has a spending problem, not a revenue problem.
U.S. spending bill threatens to increase national debt
The U.S. national debt just passed $37 trillion dollars.
This is unsustainable.
Tick, tock. pic.twitter.com/KYIwaZaQXJ
— Natalie F Danelishen (@Chesschick01) June 20, 2025
Goldberg agrees with Bessent’s argument but states that the U.S. also does not tax much compared to both the size of the country’s GDP and government outlays. He believes that either taxes have to go up, spending has to come down, or some combination of the two, but warned that it’s very complicated to figure out.
The White House said on June 7 that the GOP tax bill significantly improves the country’s fiscal trajectory by including $1.7 trillion in mandatory savings, while Trump’s tax cuts will spur economic growth. Democrats have pointed to analyses showing the bill’s tax cuts will benefit wealthier Americans far more than low- and middle-income workers while also adding to the national debt.
“No single piece of legislation in my time here in Congress will do more to add to the national debt than this one.”
–Brendan Boyle, U.S. Representative for Philadelphia.
Economists at Goldman Sachs said Tuesday the spending bill passed by House Republicans, combined with increased tariff revenue, will slightly lower the budget deficit when excluding interest payments. Goldman’s Manuel Abecasis, David Mericle, and Alec Philips believe that, coupled with borrowing costs, the bill leaves the total deficit’s course essentially unchanged.
According to the Goldman team, higher real interest rates have put U.S. debt and interest expense as a share of GDP on much steeper trajectories than appeared in previous cycles. The team argued that the scale of the debt going forward depends greatly on how interest rates move over the next couple of decades.
The economists highlighted that the $37 trillion accounts for more than 120% of the U.S. GDP, and that the Treasury Department borrows more just to meet the rising cost of servicing it. They also said the U.S. pays more in interest on its debt than it spends on Medicare and defense.
The nonpartisan Congressional Budget Office estimates the version of the GOP spending bill passed by the House would increase deficits by $2.8 trillion over the next decade. The White House and some Republican lawmakers argue that the projection should not include the cost of extending Trump’s 2017 tax cuts, which are set to expire this year without the bill.
Soaring interest payments push national debt past $37T
According to the Federal Reserve Bank of St. Louis data, the U.S. spent $1.1 trillion in interest on its debt in 2024, almost double the amount it was paying five years ago. Data from the Stockholm International Peace Research Institute also shows that the U.S. spends more on interest payments than on defense.
An analysis by the Congressional Budget Office on June 5 revealed that those costs could surge even more under the Republican tax and spending bill now being considered in the Senate. The nonpartisan agency projected that the version of the tax legislation passed by the White House last month would increase the federal deficit by $2.4 trillion over the next decade.
CBO forecasts that the surge would require the government to raise additional debt, resulting in additional interest payments of about $550 billion over the next decade. The nonpartisan think tank also estimates that by 2035, interest on the nation’s debt could reach $1.8 trillion.
Chris Edwards, an expert on federal tax at the Cato Institute, said interest costs are now bigger than defense spending. He believes that the increasing federal costs will crowd out all the other priorities in the federal budget that policymakers want to spend on.
According to the Federal Reserve Bank of St. Louis data, federal interest payments as a share of the nation’s gross domestic product stood at 3% last year. The nonpartisan Peter G. Peterson Foundation also estimates that if the current trend holds, that could rise to 4.15% of GDP by 2035.
Tesla CEO Elon Musk said on June 5 that Congress is spending “America into bankruptcy,” pointing to data showing that interest payments have risen from $416 billion in 2014 to more than $1 trillion in 2024. Moody’s Ratings also revealed that persistent and large fiscal deficits will increase the government’s debt and interest burden.
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