Written by: Reed Krueger
$39,000,000,000,000. That’s how deep in debt the United States of America is right now – and by the time you finish this article, that number will have grown by at least $15 million (Joint Economic Committee, 2026). Now, should we actually be frightened by this staggering number, or is this just a sign of a healthy, growing economy? The truth, as any honest economist will tell you, is far messier than either side is willing to admit. While the nation’s debt is not at the level of crisis deficit hawks claim, supporters of Modern Monetary Theory should not exactly dismiss the problem, either.
Deficit hawks, economists who prioritize reducing budget deficits to control national debt, have every right to be worried about the current state of the economy. Right now, debt is at 101% of GDP, meaning the United States owes more money than it produces in one year. The CBO predicts that number will jump to 108% in 4 years, creating a new United States record (Congressional Budget Office, 2026). The previous record? Well, that was right after one of the most costly wars in human history, 1946, except this time, it is due to years of continuous overspending, not fighting a world war. On top of that, the United States is projected to spend over 1 trillion dollars on interest alone this year (Fortune, 2026). Averaging everything out, the total national debt comes out to $114,000 per person (Joint Economic Committee, 2026). Certainly an alarming number, but is it as big a problem as it sounds?
On the complete opposite side of the spectrum lies Modern Monetary Theory, a position in which supporters believe governments that print their own money cannot default on debt in their own currency. To put it simply, they believe that a country with currency sovereignty creates money as it spends, meaning it can always meet its financial obligations (Dufour, 2026). Stony Brook University’s Professor of Economics and MMT’s leading voice, Stephanie Kelton, claims that while the government cannot just spend infinite money, as long as inflation is controlled through fiscal policy, the theory will remain stable (Cooper, 2024). Skeptics of the debt issue also look to Japan to illustrate that a large national debt isn’t necessarily an alarming problem. In December 2025, Japan’s national debt as a percentage of GDP was a jarring 202%, double that of the United States (CEIC Data, 2025). Nonetheless, Japan’s continuous low unemployment rate and robust economy make economists question how big a factor national debt really is. After all, government spending acts more like an engine than the enemy. Funding for research, infrastructure, and welfare programs forms the backbone of the United States economy, and trying to reduce this could slow productivity down. Foreign investors reinforce this by still showing strong demand for Treasury Bonds, furthering the case that $39 trillion is not the crisis it appears to be. However, MMT’s optimism begins to crack under the weight of basic economic reality.
For decades, borrowing was remarkably cheap, and debt was easy to carry — but interest payments on debt are now expected to exceed the nation’s entire defense spending, and the spiral that follows is relentless. Higher debt leads to higher interest payments, which widens the deficit, requiring even more borrowing. To break out of this interest spiral, some MMT supporters suggest simply printing more money; however, that leads directly to the second problem. When the government prints more money, it lessens the purchasing power of every single dollar in circulation. Zimbabwe, for example, reached a record inflation rate of 79,600,000,000% in November of 2008 (Pettinger, 2025). High national debt and a decline in national output led the government to try to print more money, which just made matters worse. Prices doubled every day, and they could no longer sell bonds due to the currency’s instability. Obviously, something this severe in the United States is highly unlikely, but simply printing more money is not a feasible option to combat this staggering national debt.
The damage, however, extends beyond the spiral itself. 31 of the 39 trillion dollars of debt comes from public debt, which increases interest rates through borrowing markets (EPIC for America, 2025). The billions in interest payments on public debt act as a slow drag on economic growth, job availability, and wages. The last, and perhaps most overlooked threat, is America’s potential inability to respond to a crisis. A growing national debt leads to a decrease in investor confidence, spiking interest rates abruptly. As of now, the United States dollar is the international currency; however, the dollar’s global dominance is no longer guaranteed. Back in 2020, the United States deployed $5 trillion in emergency funding for COVID-19 thanks to the available borrowing capacity (Granitz, 2022). If investor confidence wanes, the United States won’t be able to borrow in times of crisis. In fact, the Penn Wharton Budget Model estimates that in the next 20 years without significant policy intervention, the U.S. faces a debt ceiling at which the U.S. Treasury may be unable to roll over its obligations, resulting in either an explicit default or significant inflation (Lichtenberg, 2026). In the future, if a crisis hits and current policy remains constant, lives could be on the line. This transcends a standard national debt issue – it is a national threat to our economic and social well-being. Federal Reserve Chairman Jerome Powell said it best: “The idea that deficits don’t matter for countries that can borrow in their own currency is just wrong” (U.S. News & World Report, 2021). Powell’s warning highlights a truth many economists and politicians are afraid to acknowledge: solutions to the debt crisis exist, but political procrastination threatens this manageable problem.
While understanding the problem is quite simple, finding solutions to the issue remains close to impossible. The enormous disparity between Republicans and Democrats and their inability to find common ground makes fixing this national debt issue significantly harder. Social Security and Medicare chew up half the government budget, while defense and net interest eat up another quarter (U.S. Department of the Treasury, n.d). The math says to alter Social Security or Medicare, but politicians know touching that will only hurt them from getting elected. So, Republicans argue for tax cuts, insisting that economic growth will reduce the debt burden. Democrats, on the other hand, believe taxing the wealthy can solve the problem by itself. Time after time, we see neither of these solutions solves the problem. The longer Washington waits, the murkier the water gets. The policy changes politicians will need to induce will only grow larger the longer they wait, but no one is being proactive. The hard truth is that any real solution requires political sacrifice that neither party is willing to make. Policymakers will treat this crisis as a distant concern until the moment it isn’t.
While the United States economy will not crash tomorrow, it is exactly that security blanket that makes this whole situation so dangerous. The threat is slow and harder to escape the longer you wait. MMT’s arguments remain valid: the U.S. won’t likely see a problem like Zimbabwe, and Japan suggests that holding a large national debt isn’t automatically detrimental. However, this still does not make a trillion-dollar interest bill acceptable or give us an excuse to delay action. The debt is a political problem disguised as an economic one. What is missing is political will from both leaders and the people they represent. The dollar is still trusted by most, and the least muddy shirt in the closet. That said, even the least muddy shirt eventually needs to be washed.
References
CEIC Data. (2025). Japan government debt: % of GDP, 1982–2026. https://www.ceicdata.com/en/indicator/japan/government-debt–of-nominal-gdp
Congressional Budget Office. (2026, February 11). The budget and economic outlook: 2026 to 2036. https://www.cbo.gov/publication/62105
Cooper, W. (2024, September 12). Stephanie Kelton and the deficit “myth.” LGT Private Banking. https://www.lgt.com/global-en/market-assessments/insights/financial-knowledge/stephanie-kelton-232638
Dufour, M. (2026, February 26). What is modern monetary theory? An economist explains how it could help Canada. The Conversation. https://theconversation.com/what-is-modern-monetary-theory-an-economist-explains-how-it-could-help-canada-256868
EPIC for America. (2025). National debt tops $39 trillion. https://epicforamerica.org/federal-budget/national-debt-tops-39-trillion/
Granitz, T. (2022). COVID-19 relief funds two years later: Where did the money go and who is watching it? Taxpayers Against Fraud Coalition. https://www.taf.org/covid-19-relief-funds-two-years-later-where-did-the-money-go/
Lichtenberg, N. (2026, March 18). The national debt just crossed $39 trillion — almost doubling since Trump vowed to erase it. Fortune. https://fortune.com/2026/03/18/how-big-national-debt-39-trillion-trump-promises/
Pettinger, T. (2025, December 8). Hyper inflation in Zimbabwe. Economics Help. https://www.economicshelp.org/blog/390/inflation/hyper-inflation-in-zimbabwe/
U.S. Congress Joint Economic Committee. (2026, March). Monthly debt update. https://www.jec.senate.gov/public/vendor/_accounts/JEC-R/debt/Monthly%20Debt%20Update.html
U.S. Department of the Treasury. (n.d.). Federal spending. Fiscal Data. https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/
U.S. News & World Report. (2021, January 8). What is modern monetary theory (MMT)?https://money.usnews.com/investing/investing-101/articles/what-is-modern-monetary-theory-mmt