Washington — As President Donald Trump celebrates the passage of his “Big Beautiful Budget Bill,” concern over America’s growing debt is rising again. The U.S. national debt has officially hit $37 trillion, and analysts warn this could pose serious long-term economic risks.
Trump’s new tax-and-spend law is projected to add at least $3 trillion to the debt. Critics, including former ally Elon Musk, have sharply condemned the move, while investor Ray Dalio warns the country is at a financial "inflection point."
“If this is not dealt with now, the debts will build up to levels where they can't be managed without great trauma,” Dalio said.
Debt Signals Turning Red
Markets are already flashing warning signs:
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The U.S. dollar has dropped 10% against the pound and 15% against the euro this year.
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The yield curve has steepened, indicating skepticism about long-term U.S. credit health.
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Borrowing costs remain stable, but investor confidence is slipping.
Despite this, the U.S. continues to borrow heavily to cover the gap between revenue and spending, with interest payments projected to exceed $10 trillion annually if trends continue.
Three Possible Futures
Experts outline three paths the U.S. could take:
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Severe spending cuts or tax hikes to reduce the deficit
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More money printing, risking inflation and asset inequality
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A catastrophic default on debt, though still considered unlikely
Still, the world relies on the U.S. dollar due to a lack of alternatives. As economist Mohamed El-Erian puts it:
“The dollar is like your cleanest dirty shirt, you have to keep wearing it.”
Even Bank of England officials acknowledge rising concerns over U.S. fiscal health, suggesting the issue is high on Treasury Secretary Scott Bessent’s agenda.
Is the Debt Manageable?
Measured against GDP, the U.S. debt is high, but not the worst globally. With an economy producing $25 trillion annually, some analysts argue the country still has room to maneuver.
Yet, the rising debt combined with reduced foreign confidence, weaker currency, and growing inequality has sparked fears that the world’s most trusted currency could slowly lose its dominance if not managed wisely.
As one commentator noted:
“$37 trillion is an unfathomable number. If you saved $1 million every day, it would take 100,000 years to reach it.”
