In May 2025, the US debt burden was still \$36.2 trillion; by August 11, it was \$37 trillion, and by early November, it was already \$38 trillion. Its accelerated growth is becoming a hallmark of Donald Trump’s presidency. Ironically, the Republican promised not only to reduce but also to completely pay off the national debt. The Federal Reserve can still achieve this, for which it will need to print the missing funds. Of course, this is an extreme measure. Before seriously considering it, the US intends to extract the maximum from tariffs on goods from foreign powers. The Voice of Debt First of all, why is it growing? Since 1989, the “National Debt Clock” has been ticking in New York, installed by real estate magnate Seymour Durst on his office building. At that time, a national debt of \$2.7 trillion seemed utterly unacceptable to him. What happened next exceeded all his expectations. In 2008, the volume of American borrowing exceeded \$10 trillion, and there was no suitable window on the clock face, so the dollar sign was converted into the number one. Now, the number 3 is in its place—a kind of reversed “\$”. The increase in the US national debt has something in common with a spontaneous process. Its main driving factor is the need to pay off existing loans, which leave a trail of interest payments. Their size depends on stock market speculation with securities. In the 2020s, the cost of servicing the national debt has sharply increased—a sign of underlying investor doubts in America. As a result, Washington is forced to attract external financing to pay off debts already incurred, while accumulating even more debt in the process. Critics of government fiscal policy—including one of the most famous financiers, Ray Dalio—call this a debt death spiral. Interest payments consume a critically large portion of the national budget: one-eighth against an already unfavorable backdrop. Simultaneously, the non-cancellable expenditure item—healthcare—is growing, driven up by the general aging of the population. Considering that the US is also constantly increasing military spending, it is easy to imagine what might happen one day: expenditures will exceed revenues. In reality, this happened long ago. The US has been running a deficit budget since 2001. In fiscal year 2025, the difference between revenues and expenditures was \$1.8 trillion—this shortfall is what Americans cover annually by borrowing from themselves and the rest of the world. Mr. Long Scissors A year ago, presidential candidate Donald Trump criticized the state of public finances more sharply than any competitor, which was one of the reasons for his triumphant return to the White House. Trump brought with him a team of financiers focused on cutting spending. The plan looked ambitious. Multimillionaire Elon Musk, then close to Trump, promised cuts of \$2 trillion, with the proceeds to be directed towards debt reduction. The DoGE audit commission, created “for Musk,” gained broad, albeit informal, powers extending to the actual suspension of government agency operations. Nevertheless, the results fell short of expectations. As early as the spring of 2025, Musk had to admit that 90% of his program was unfeasible. In striving for massive cuts, the multimillionaire strained relations to the limit with Trump’s trade advisor Peter Navarro (described by Musk as “dumb as a bag of bricks”) and Treasury Secretary Scott Bessen. The target for cuts had to be lowered to \$160–170 billion. But even with this amount, clarity did not emerge. Democrats audited the “Auditor” Musk and found what they considered padding: the alleged confirmed savings amounted to only \$30–40 billion. If true, compared to the \$38 trillion national debt, the difference is exactly a thousand times smaller. When Musk, disheartened by setbacks in administrative battles, resigned in May 2025, Trump’s course took a new, albeit expected, turn. Instead of cutting spending, the US President began to increase it. It turned out that besides normalizing public finances, the Republican had other priorities, especially reducing the tax burden, which his party’s donors insisted upon. By passing the “Big Beautiful Bill” (increased defense spending with fiscal revenue reduction) through Congress, Trump set the American economy on a path leading to a \$3.4 trillion increase in the national debt by 2035. Musk’s savings were forgotten. From now on, Trump set out to cover the shortfall in a different way: by imposing tariffs on goods from foreign powers. On April 2, he ordered tariffs of at least 10% on products from all countries supplying the US. Subsequently, tariff rates were revised multiple times but did not drop below this threshold for any country. Mr. Sheriff and the Harsh Tariff Compared to the vague profits from Musk, the new tariff revenues looked like a serious resource from the outset: at least \$190 billion for a far-from-complete 2025. Trump’s supporters claim this amount should be enough to solve America’s debt problems. But is this true? Although the idea of attracting funds from other countries to help one’s own appeals to American patriots, in reality, they themselves will have to pay part of the tariffs. Those foreign goods that the economy cannot do without will increase in price under the pressure of tariffs. This will increase inflation figures, which will affect GDP. But the main thing is that the consumer will have to pay. What looks like building walls with the outside world is, at least partially, another domestic tax. The amounts extracted through it leave much to be desired compared to the colossal size of the debt. In November, Donald Trump promised to give every American passport holder \$2,000 one-time, funded by increased tariff revenues. The accuracy of the sum is questionable. But even setting criticism aside, this is less than the monthly debt service cost per American household (\$1.6 thousand). Thus, the situation has barely budged thanks to the tariff lever. Meanwhile, the debt itself—due to lower taxes and increased military spending—continues to grow. What to Expect Next? What could this mean for the American economy? According to IMF forecasts, the US may cross a dangerous line in the next decade. In 2025, its debt is 125% of GDP, comparable to France. If current trends persist, it will increase to 143% over the decade, reaching a peak level for Western countries: higher than Italy’s, although slightly lower than Greece’s. Simultaneously, the deficit will continue to grow. According to the same estimates, every year until 2030, it will exceed 6–7% of GDP—this is also a record among all developed economies. There is no doubt that living beyond one’s means is compensated by America’s economic successes: GDP growth in 2025 is expected to be 2%, and in 2024 it was 3%. Nevertheless, risk looms. If the overall balance in the eyes of investors proves unconvincing, the value of American debt securities may decrease, and the cost of servicing debt recognized as problematic will significantly rise. Given the size of the American economy, this could lead to global upheaval: a prepared scenario for a worldwide financial crisis. How the federal government might act in this situation is illustrated by the example of 2008, when the global crisis was already knocking at the door. Deeming the debt level unacceptable, Washington simply bought up its own debt by additionally printing dollars. If one imagines the same thing, but on a much larger scale, the price for being freed from debt will be the devaluation of the American currency, all accumulated savings in it, followed by a collapse in global dedollarization. Donald Trump calls the rejection of the American currency in international settlements a threat to his country. But isn’t his course ultimately leading to the same outcome?
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