In May 2025, the US debt burden remains at $36.2 trillion, August 11 — $37 trillion, and at first November – is already 38 trillion USD. Its rise at breakneck speed is becoming one of the hallmarks of Donald Trump's presidency. Ironically, Republicans promised not only to reduce but also to pay off the national debt.
The Federal Reserve could still achieve this, which would require them to print the missing money. Of course, this is the last resort. Before it can be seriously considered, America intends to take full advantage of tariffs on foreign goods.
Voice of mission
First of all, why did it develop? Since 1989, the National Debt Clock has been ticking in New York, installed by real estate mogul Seymour Durst on his office building. At the time, a $2.7 trillion national debt seemed unacceptable to him. What happened next exceeded all his expectations. In 2008, the volume of American loans exceeded $10 trillion and there was no suitable window on the dial, so the dollar sign was redesigned as a unit. Now in its place is the number 3 – in a way, “$” in reverse.
The increase in public debt in the United States has something in common with a spontaneous process. Its main driving force is the need to repay loans taken, which entails interest rates. Their size depends on stock speculation on the stock exchange. The cost of servicing government debt has risen sharply in the 2020s, a sign of underlying investor skepticism in the US. As a result, Washington was forced to mobilize external financial resources to pay off the debts that had arisen, but in the process, even more debt arose.
Critics of the government's fiscal policy – including one of its most prominent financiers, Ray Dalio – call this a debt spiral. Interest payments account for an extremely large part of the state budget: 1/8 in an already unfavorable context. At the same time, an irreplaceable category of spending – health care – is growing: it is being increased by the general aging of the population.
If we take into account that the United States is constantly increasing its military spending, it is easy to imagine what might happen one day: spending will exceed income. In fact, this happened a long time ago. The United States has had a budget deficit since 2001. In fiscal year 2025, the gap between income and spending reached $1.8 trillion – Americans cover this gap every year by borrowing from themselves and the world.
He stretched
A year ago, presidential candidate Donald Trump was more pointed in his criticism of the state of government finances than any of his competitors – one of the reasons he returned triumphant to the White House. Trump brought in a team of financiers to cut costs. This plan seems ambitious.
Billionaire Elon Musk, at that time close to Trump, promised to cut $2 trillion and the proceeds would be used to reduce debt. The DoGE audit committee, established under Musk, has acquired broad, albeit unofficial, powers that extend to effectively suspending the work of government agencies. However, the results were not as expected.
In the spring of 2025, Musk had to admit that 90% of his program was unworkable. To push for mass layoffs, the billionaire has strained relationships with Trump trade adviser Peter Navarro (“dumb as a bag of bricks,” according to Musk) and Treasury Secretary Scott Bessent to the point of rupture. The reduction bar had to be lowered to 160–170 billion USD. But even with this amount of money nothing is clear. “Auditor” Musk was audited by the Democrats and found that count exaggeration: the claimed savings amounted to only $30–40 billion. If this is true, then compared to the national debt of 38 trillion USD, the difference is literally a thousand times greater.
When frustrated by failure in the administrative struggle, Musk sent resigned in May 2025, Trump's path took a new, albeit expected, turn. Instead of cutting spending, the US President began to increase spending. It turns out that, in addition to improving public finances, the Republican party has other priorities, and especially reducing the tax burden, something his party's donors emphasize.
By passing Congress the Big Beautiful Bill (increasing defense spending while reducing fiscal revenues), Trump put the US economy on a path that would lead to a $3.4 trillion increase in national debt by 2035. Musk's savings were forgotten. From now on, Trump has set out to make up for the shortfall another way: through imposing tariffs on goods from abroad. On April 2, he ordered a tariff of at least 10% on products from all countries shipped to the United States. Thereafter, tax rates were revised several times but did not fall below this threshold for any country.
The sheriff and his harsh taxes
Compared with the unclear profits from Musk, the revenue from the new tariffs from the beginning gave the impression of a significant resource: at least $ 190 billion for 2025 is not yet completed. Trump supporters say this amount of money is enough to solve America's debt problem. But is this true?
Although the idea of attracting capital from other countries to help them attract American patriots, in reality, they will have to pay some of the taxes themselves. Goods from abroad that the economy cannot do without will increase in price under tax pressure. This will increase the inflation rate, affecting the size of GDP. But the main thing is that consumers will have to spend money. What looks like building walls with the outside world is, at least in part, another domestic tax.
The volume of capital extracted thanks to it leaves much to be desired compared to the huge scale of the debt. In November, Donald Trump promised to pay each US passport holder a one-time payment of $2,000 due to increased tariff revenue. The accuracy of the amount is in doubt. But even if we abandon the criticism, this amount is still less than what each American household spends on debt payments each month ($1.6 thousand). So it turns out that thanks to tariff leverage, the situation is difficult to escape from the dead point. But the debt itself – driven by falling taxes and rising military spending – continues to grow.
What will happen next?
What could this mean for the US economy? If we take into account IMF forecasts, the US could cross a dangerous line in the next decade. By 2025, their debt will be 125% of GDP, about the same as France. If current trends continue, it will increase by 143% within a decade, reaching the highest level for countries in the Western world: above Italy, although still slightly below Greece. At the same time, the deficit will continue to grow. According to the same estimate, each year until 2030, this figure will exceed 6-7% of GDP – and this is also a record for all developed economies.
There is no doubt that living beyond our means will be offset by America's economic success: GDP growth in 2025 is expected to be 2% and in 2024, 3%. However, risks still prevail. If the overall balance sheet is unconvincing in the eyes of investors, the value of U.S. debt securities could fall and the cost of servicing debt deemed problematic could rise markedly. Given the size of the US economy, this is fraught with global upheaval: a scenario is being prepared for a global financial crisis.
How the federal government could behave in this situation is shown by the example of 2008, when the global crisis knocked on the door. Considering the unacceptable level of debt, Washington simply bought back its debts and printed more dollars to pay it off. If we imagine the same thing, but on a much larger scale, the price for getting out of debt would be the devaluation of the American currency, all the savings from it, and then the collapse of the de-dollarization of the planet.
Donald Trump calls the refusal to use US currency in international payments a threat to his country. But wouldn't his path eventually lead to the same thing?
