The Future Cost: Our Offspring and the Impending Danger of the Spiraling Federal Debt

Contemplate the U.S. economy as a seemingly robust individual, who, beneath their exterior, is grappling with a lethal ailment. The silent yet deadly malady in this case? The colossal federal debt. In the words of Treasury Secretary Scott Bessent, “Our fiscal situation is akin to a critically ill, chain-smoking heavyweight.” The startling reality is that the federal debt has reached a staggering $37 trillion and shows no signs of abating. This translates to an alarming debt load of over $300,000 per taxpayer.

US Debt Clock

The nation’s annual spending on interest surpasses its defense budget, nearly reaching a trillion dollars. The future paints an even bleaker picture, with projections indicating that in a decade, interest payments could gobble up 30 percent of the government’s revenue. Federal Reserve Chairman Jerome Powell has forewarned, “The federal debt is on a perilous trajectory, with the endpoint unknown.”

Studies conducted by the Penn Wharton Budget Model suggest that the U.S. has a window of fewer than 20 years to address this debt crisis or risk defaulting. However, the U.S. capital’s long-standing strategy has been to procrastinate on spending cuts. The economy’s continued growth often gives the illusion that the mounting government debt isn’t a cause for concern. But some economic experts caution that a financial reckoning is on the horizon, and its implications could be severe.

Chris Edwards, an economist at the Cato Institute, emphatically states, “We are in an exceedingly grave and hazardous situation. The federal government has already borrowed $30 trillion. If no corrective measures are taken in the coming years, experts predict that the debt could soar to $50 trillion.”

The government claims that the recently enacted ‘One Big Beautiful Bill’ will curtail the debt. However, the Tax Foundation apprehends that this spending package may add an extra $3 trillion to the federal debt over the next ten years. Daniel Bunn, the Tax Foundation’s president and CEO, asserts, “There’s a significant impact on the long-term debt and deficit. Lawmakers could have made more judicious decisions to ensure fiscal sustainability.”

Despite the enormous federal debt, its repercussions appear insignificant as the global market continues to finance it by purchasing U.S. Treasury notes. This is why some, like ‘Big Short’ investor Steven Eisman, consider the federal debt a non-issue. “If a viable alternative to treasuries existed, I’d be more concerned about the deficit. But in the absence of such an alternative, there’s no cause for worry,” Eisman explained.

Significant holders of U.S. treasuries include Japan and China. Hypothetically, if China, in a future altercation with the U.S., were to offload its treasuries, the dollar’s value would plummet and inflation would surge. Even without such a scenario, the federal debt is impoverishing Americans and could cost them up to $14,000 annually in lost income by 2054, as per the Congressional Budget Office.

Sen. Ron Johnson (R-WI) warns, “We are jeopardizing our children’s future. It’s unethical, it’s immoral, and it must be halted.” Echoing this sentiment, Rep. Chip Roy (R-TX) stated during recent budget discussions, “We are issuing cheques we cannot honor, and our children will bear the burden.” While most in Washington concur that the federal debt must be reduced, finding the political resolve to execute this is an entirely different challenge.