The $38 Trillion Question: Can the U.S. Keep Borrowing Forever?

It’s a strange cycle: every few years, the United States edges up against its statutory debt ceiling and risks a technical default. At present, the gross national debt stands at about $37.85 trillion as of October 3, 2025, having risen by roughly $2.17 trillion over the past year. 

Of that total, debt held by the public is about $30.28 trillion, while intragovernmental holdings make up the rest. 

From Modest Debt to Historic Burden

Back in 2000, U.S. federal debt was far more modest. Over subsequent decades, the debt expanded rapidly, driven by structural deficits, wars, tax cuts, and economic crises.

Each presidency, under political and electoral pressure, maintained or enhanced spending on entitlement programs, infrastructure, and defense. Even attempts at tax reforms often led to revenue losses that boosted deficits further.

By the time Joe Biden took office, the U.S. had already accumulated a tremendous debt burden. In response to the COVID-19 crisis and economic downturn, his administration approved stimulus packages and recovery plans totaling trillions of dollars, adding significantly to the debt load.

Debt by the Numbers, 2025

These figures reflect not only the accumulation of past deficits but also the fact that interest payments on debt are now one of the largest line items in the federal budget, second only to major entitlement programs like Social Security and Medicare.

Politics, Partisanship & the Debt Ceiling

Over the past two decades, both Republican and Democratic presidents have contributed substantially to the increase in national debt — often blaming the other party while pursuing expansive fiscal agendas of their own.

According to The Daily, the increase in federal debt under Bush and Trump combined was about $12.7 trillion, while under Obama and Biden it was about $13 trillion. (These figures were drawn prior to 2025 — the trend likely continues upward.)

Under Trump, the debt rose from roughly $19 trillion in early 2017 to about $27.8 trillion by early 2021 — an increase of approximately $7.9 trillion.
Meanwhile, the Biden administration has added heavily to that, especially with pandemic-era stimulus.

In practice, neither major party has shown consistent willingness to enact deep structural reforms. Republicans often argue for cutting spending but also support tax cuts and large defense budgets. Democrats generally resist spending cuts to social programs, preferring higher taxes or debt financing instead.

The real danger emerges when partisan gridlock prevents Congress from raising or suspending the debt ceiling. At that point, even if the U.S. can theoretically afford its debt, the inability to issue new debt could halt the government’s ability to meet obligations — triggering a technical default and damaging global confidence in U.S. credit.

Radical Proposals, Technical Workarounds & Risks

Some unconventional ideas have surfaced in recent years:

  • One proposal suggests minting a $1 trillion platinum coin, depositing it at the Federal Reserve, and using it to satisfy some obligations without needing congressional approval. While legally debated, most economists view it as a gimmick with serious risks.

  • Another idea: issuing ultra-high interest debt (e.g. $1 trillion in bonds at 105% interest) to effectively force new borrowing — but such a move would explode future obligations and likely spook investors.

The core issue is this: as long as debt continues growing, the U.S. must rely on issuer credibility, stable demand for U.S. Treasurys, and political consensus around debt ceiling decisions. Should confidence falter or political gridlock intensify, the U.S. risks entering a full-blown credit crisis.


Vivian


Related post:     Gold Surges as U.S. Stocks Tumble Amid Escalating U.S.–China Tensions

                        The Domino Effect of Currency Crises



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