The U.S. government’s gross national debt has exceeded $37 trillion, a historic figure that underscores the accelerating debt burden on America’s balance sheet and the growing cost pressures on taxpayers. This $37 trillion update is detailed in the latest Treasury Department report recently released, which tracks the nation’s daily finances.
The national debt surpassed $37 trillion years earlier than pre-pandemic projections. The Congressional Budget Office’s January 2020 forecasts had anticipated gross federal debt exceeding $37 trillion after fiscal year 2030. However, the debt escalated more quickly than expected due to a multi-year COVID-19 pandemic that began in 2020, which halted much of the U.S. economy. The federal government borrowed extensively under then-President Donald Trump and former President Joe Biden to stabilize the national economy and facilitate a recovery.
More government spending has been authorized following Trump’s signing of the Republicans’ tax cut and spending legislation earlier this year. This law is projected to add $4.1 trillion to the national debt over the next decade, according to estimates from the Congressional Budget Office.
Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, stated that government borrowing exerts upward pressure on interest rates, “adding costs for everyone and reducing 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.”
Impacts of rising debt on Americans
The Government Accountability Office highlights some impacts of rising government debt on Americans—such as higher borrowing costs for mortgages and cars, reduced wages due to businesses having less capital available for investment, and increased prices for goods and services.
Peterson emphasizes how the trillion-dollar milestones are “piling up at a rapid rate.” The U.S. reached $34 trillion in debt in January 2024, $35 trillion in July 2024, and $36 trillion in November 2024. “We are now adding a trillion more to the national debt every 5 months,” Peterson said. “That’s more than twice as fast as the average rate over the last 25 years.”
According to the Congressional Budget Office (CBO), before recent legislative actions, the federal government was already projected to spend $1.9 trillion more than it collected in fiscal year 2025. The passage of a substantial tax and spending package, dubbed the “megabill,” is expected to add an additional $3.4 trillion in deficit spending over the next decade, pushing total debt above $52 trillion by 2035.
Debt exceeds U.S. economy size
The debt currently surpasses the size of the entire U.S. economy, with gross domestic product (GDP) estimated at $30.3 trillion in mid-2025. This results in a debt-to-GDP ratio of approximately 119.4 percent, one of the highest levels historically. The increase in debt has been largely driven by mandatory spending on Social Security, Medicare, and interest payments on the debt itself.
Private investors own the largest share of the debt, approximately $24.4 trillion as of March 2025. Federal trust funds and retirement programs hold around $7.3 trillion, while the Federal Reserve possesses $4.6 trillion. Foreign governments also own a significant portion, with Japan, the United Kingdom, and China as the top holders, although their share has decreased in recent years as some have reduced holdings due to changing economic priorities.
Interest payments on the debt are rising sharply, currently exceeding annual spending on Medicare or national defense, reaching nearly $880 billion in 2024. This increase in interest costs places pressure on the federal budget, crowding out spending on other priorities.
The escalating debt and deficits raise concerns about fiscal sustainability, economic growth, and potential effects on interest rates and inflation. Public sentiment is increasingly focused on this issue, with a majority of Americans viewing the reduction of the budget deficit as a priority for policymakers.
