The U.S. national debt has reached $36.9 trillion, sparking growing concerns about its impact on the economy and average Americans. While the federal deficit may seem distant from daily life, its effects are already being felt—through higher mortgage rates, rising inflation, and long-term threats to job growth and retirement savings.
Federal borrowing plays a key role in influencing interest rates. As the government borrows more to cover its expenses, it competes with the private sector for capital. This drives up interest rates, making loans for homes, cars, and businesses more expensive. At the same time, if the government resorts to printing money to handle its ballooning debt, inflation could spiral further out of control, weakening Americans’ purchasing power.
The cost of servicing the debt has already surpassed military spending and continues to rise, particularly in an environment of high interest rates. This means that an increasing share of government revenue is going toward paying interest instead of funding essential services.
Without higher revenues, the government risks further borrowing, deepening the deficit and worsening its long-term economic position. The value of money has eroded significantly in recent years, with everyday items like groceries costing much more. This loss of purchasing power is not solely due to inflation, but also a consequence of sustained government borrowing.
Higher debt levels also affect the housing market, as mortgage rates trend upward. Potential homebuyers face steeper monthly payments, reducing affordability and limiting access to property ownership. Businesses, too, are impacted. As taxes rise and borrowing costs increase, companies are likely to cut back on hiring, promotions, and raises. This could result in a tighter job market and slower wage growth, even for those who stay employed.
Retirement savings are another area of concern. Market volatility tied to fiscal instability could lead to unpredictable swings in retirement accounts, leaving savers vulnerable.
Despite these risks, recent legislation is set to add an estimated $2.4 trillion more to the national debt. Many Americans worry tax cuts will widen the deficit over time, even if intended to stimulate economic growth. As debt levels continue to rise and political decisions shape the nation’s financial future, Americans could face tougher economic realities in the years ahead—higher taxes, reduced opportunities, and a shrinking sense of financial security.