Catenaa, Wednesday, May 28, 2025- The United States’ national debt has surged past $36 trillion, prompting renewed warnings over the country’s long-term fiscal health as lawmakers advance proposals that could deepen the deficit further.
On Sunday, a key congressional committee approved legislation to extend President Donald Trump’s 2017 tax cuts -a move that could add $5 trillion more to the national debt.
The bill is expected to pass the House soon, despite credit rating agency Moody’s downgrading the US outlook last week over mounting debt concerns.
Currently, the US debt represents 122 percent of its gross domestic product, with borrowing rising by $1 trillion every quarter.
A large portion of this debt -$27.2 trillion – is domestically held, with private investors, government agencies, and the Federal Reserve accounting for the majority.
The rest, roughly $9 trillion, is held by foreign investors, led by Japan, the UK, and China.
Debt financing is managed through US Treasury securities, including short-term bills, medium-term notes, and long-term bonds.
These are widely viewed as secure investments but growing reliance on debt could squeeze future public spending and lead to higher taxes or interest rates.
Foreign ownership of US debt has grown fivefold since 1970, and nations like Japan and China have hinted at leveraging their holdings in trade talks. Meanwhile, China has gradually reduced its exposure, reaching the lowest level since 2009.
Analysts warn the rising debt burden may increase costs for average Americans through higher interest rates and potential tax hikes.
