The United States today is witnessing the highest levels of debt in its history, having surpassed the 34 trillion dollar mark in public debt, which represents about 96% of the GDP. This ratio has not been recorded since World War II when it reached record levels due to massive military spending.
The accumulation of US debt has noticeably increased since the early 2000s, specifically with the long and costly wars in Afghanistan and Iraq, which added about 8 trillion dollars to the federal budget. This was followed by the global financial crisis in 2008, where the US government had to spend trillions of dollars to rescue troubled banks and companies.
With the Tax Cuts and Jobs Act during President Donald Trump's administration in 2017, the United States lost a significant source of government revenue, greatly widening the financial deficit gap. Then came the COVID-19 pandemic to add a tremendous burden, as the government injected about 5 trillion dollars in stimulus and relief packages, leading to an unprecedented surge in debt levels.
In addition to the aforementioned factors that contributed to the exacerbation of US debt, there are other factors that increased the financial burden on the United States, such as financial support for Israel - the Zionist occupation and aid to Ukraine.
The US government primarily relies on issuing bonds and treasury bills to cover the deficit, sold to local and international investors for interest. However, the continued increase in borrowing forces the government to raise interest rates to make bonds more attractive, raising the cost of borrowing for the entire economy, and directly burdening the American citizen through higher interest on personal loans and mortgages.
The current situation warns the economy of the continued high levels of debt, as the United States may reach a point of no return within a decade, where debt interest exceeds its repayment capacity. This scenario is very similar to what happens when credit card interest accumulates uncontrollably, warning of a credit bubble burst and a comprehensive financial crisis.
The available options to address this crisis seem limited and complex. The first is to achieve a massive economic boom, as happened after World War II, which is unlikely today due to an aging population and slowing economic growth. America's only hope was artificial intelligence, and it has been shown that China currently outperforms them in this regard. The second option is to resort to printing more money, which could lead to massive inflation and a sharp decline in the value of the US dollar. The third option involves significantly raising taxes, which would negatively impact economic growth and future generations.
Amid this fragile economic situation, the United States has adopted protectionist measures, as President Donald Trump announced in April 2025 the imposition of a 10% tariff on all imports, increasing it to 46% on some countries such as Vietnam. These policies raised international concerns about the outbreak of a trade war, threatening global economic stability.
In parallel with protectionist economic policies, Washington has escalated its military presence in sensitive areas such as the Middle East, where it sent aircraft carriers and strategic bombers to the Arabian Gulf in confrontation with Iran. This overlap between the internal financial crisis and external escalation reminds us of the global conditions that preceded World War II, when economic crises led to the rise of extremist movements and the outbreak of major international conflicts.
Under these complex and unprecedented circumstances, investors are advised to diversify their investment portfolios and focus on assets that protect them from inflation, such as inflation-protected bonds, gold, silver, and Bitcoin as digital assets that have the ability to retain value during financial turmoil, in addition to considering international markets that have stronger budgets and better financial stability, such as China.
The question remains whether these American economic and military policies will lead to a reshaping of the global system? And do the current circumstances lead us to repeat dark historical scenarios, but this time with unconventional economic and military tools?
Saif Abusurour
