US debt crisis is reaching historic levels — and for the first time in a century, America’s debt burden is on track to surpass Italy and Greece, according to the International Monetary Fund (IMF). The warning comes as the United States faces record spending, surging interest payments, and widening deficits that show no signs of slowing.
The IMF projects that US general government gross debt will hit 143.4% of GDP by 2035, up sharply from 123% in 2024. That means the world’s largest economy will soon carry a heavier debt load than Italy at 137% and Greece at 130%, both countries historically viewed as symbols of high public debt in advanced economies.
The numbers mark a major turning point in global finance. The United States, once a model of fiscal stability, now faces a debt path that economists say is unsustainable without major policy changes. The US national debt has already crossed $38 trillion, a record high, as interest costs and spending outpace revenues at every level of government.
The IMF warns that America’s budget deficits will remain above 7% of GDP every year through 2035, the highest sustained level among major economies. Persistent shortfalls are being fueled by expensive tax cuts, soaring entitlement spending, rising defense budgets, and higher borrowing costs triggered by the Federal Reserve’s rate hikes.
Debt servicing is now among Washington’s biggest expenses. The government’s annual interest payments have doubled in just three years, now surpassing federal spending on education and transportation combined. Every 1% increase in average interest rates adds roughly $380 billion to annual borrowing costs — money that no longer goes toward public programs or investments.
MORE:
Federal Government Continues To Spend Like Drunken Sailors In Port Despite Schumer Shutdown (Federal Debt Breaches $38 Trillion, Budget Deficit Breaches $7 Trillion)
Of course, CPI data release has been delayed thanks to the US Federal government shutdown (aka, the Schumer Shutdown). But never fear, the Federal government is continuing to spending like the proverbial drunken sailors in port. The Federal debt just breached the $38 trillion mark.
And the Federal budget deficit just breached the $7 trillion mark. Why? Too much Federal spending! The Federal government COULD raises taxes, but that would strangle the economy. But politicians in DC are terrified of not being re-elected, so they are terrified of cutting spending.
What about The Federal Reserve? M2 Money printed by The Fed now exceeds $22 trillion and The Fed’s balance sheet is now around $6.6 trillion. Can The Fed print our way out of the debt crisis? Think of the Weimar Republic with its hyperinflation due to excessive money printing.
