America’s $36 trillion debt sounds apocalyptic—but is it? This post digs into the alarm bells, the counterpoints, and what economists on both sides say. Includes data, charts, and sources.
America’s Debt Bomb Is Ticking — But Is It About to Explode?
The headlines scream: $36 trillion in U.S. debt.
IMF warnings. Credit downgrades. Tumbling dollar.
But hold on—is the situation truly catastrophic, or just politically weaponized?
Let’s unpack the fears, the facts, and the counter-arguments experts are making.
The Alarms: IMF, Moody’s, and Dalio’s Red Flags
The IMF has warned that the U.S. is losing fiscal grip.
Moody’s recently cut the U.S. credit outlook to AA1, citing soaring interest payments and a lack of spending discipline.
And Ray Dalio, hedge fund giant and 2008 prophet, said:
“America is in the late-stage debt cycle of empire decline.”
According to the U.S. Treasury’s Debt to the Penny tracker, public debt crossed $36 trillion this year.
U.S. National Debt Over Time
Plot from 2000–2025 showing the rise from ~$5 trillion to $36 trillion.
The Bill: Trump’s “One Big Beautiful Act”
Trump’s tax-cut proposal, officially titled the One Big Beautiful Bill Act, spans over 1,000 pages. It promises:
- Deep income tax cuts
- Capital gains relief
- Corporate tax slashes
Brookings estimates a potential $4 trillion loss in revenue over the next 9 years (source).
Markets responded fast:
- S&P fell 3% in early May
- Dollar Index slid 1.7%
- 10-year bond yields jumped past 5% (Bloomberg)
Counterview: Is Debt Always Dangerous?
Not all economists agree with the “doom” narrative.
Paul Krugman (Nobel laureate, NYT columnist):
“The U.S. issues debt in its own currency. It cannot go bankrupt the way Greece or Argentina can.”
Stephanie Kelton (Modern Monetary Theory advocate):
“We need to stop thinking about the federal budget like a household budget. Deficits are not inherently bad.”
Jason Furman (Harvard economist, Obama-era advisor):
“It’s not the size of the debt. It’s the trajectory. If interest payments stay below GDP growth, we can manage this.”
Key Argument: Debt isn’t the crisis—stagnant growth and political paralysis are.
Global Debt: Worse Elsewhere?
The U.S. debt-to-GDP ratio is high—but others are worse.
CountryDebt-to-GDP (%)
Japan 235%
Singapore 175%
Greece 142%
Bahrain 141%
Italy 137%
United States 123%
(According to IMF Fiscal Monitor, April 2025)
Bar graph: Debt-to-GDP by Country (2025)
Crucial difference: The U.S. prints the world’s reserve currency. A weaker dollar means global ripple effects—higher import costs, capital flight, and investor anxiety.
Reality Check: Can America Grow Its Way Out?
Debt is only one part of the equation. The other is growth.
If GDP growth outpaces interest rates on debt, the burden shrinks over time. And the U.S. still holds:
- The world’s largest tech sector
- Deep capital markets
- Global investor trust (despite the noise)
As Gopinath said:
“You don’t borrow your way out of debt. You grow your way out.”
The real test? Whether the U.S. can reform without choking that growth.
Our Commitment at Firstpost
We are not here to panic you. We are here to inform you.
That means:
- Every visual and quote now comes with a source
- We correct mistakes transparently
- We avoid hysteria and focus on clarity over chaos
Because when the numbers scream and the headlines roar—what you need is context, not noise.
Final Thought
Yes, $36 trillion is eye-watering.
Yes, political dysfunction makes it worse.
But the U.S. isn’t a failed state—it’s a messy superpower navigating a complex fiscal future.
The debt bomb is real. But whether it explodes—or defuses—depends on what comes next.