U.S. Public Debt Reaches New Record Early 2026: The Burden of $38.5 Trillion and the Unsolvable Puzzle

As we enter the first months of 2026, the US public debt has officially surpassed $38.5 trillion, a figure that the Responsible Federal Budget Committee( previously projected would not be reached until around 2030. This development indicates that the US government’s borrowing pace is far exceeding previous scenarios and raises serious concerns about long-term fiscal sustainability. The Origin of the New Debt Wave The recent surge in public debt mainly stems from the COVID-19 pandemic period. When the economy faced a crisis, the federal government launched massive spending packages to prevent businesses from going bankrupt, ensure workers continued to earn income, and keep financial markets from collapsing. The short-term fiscal injections helped the US weather the immediate shock but left behind a colossal debt burden that persists to this day. In the context of rising inflation and escalating prices across the economy, figures in the trillions of dollars no longer seem as “shocking” as before. From daily shopping bills to national budget books, strings of zeros are appearing more and more frequently. Interest Payment Costs: Increasing Pressure Another alarming point is the cost of servicing public debt. In 2020, the US government spent about $345 billion on interest payments. By 2026, this figure has nearly tripled, approaching $1 trillion annually. According to the Responsible Federal Budget Committee), this is no longer a temporary phenomenon but has become the “new normal.” With a total debt of approximately $38.4–$38.5 trillion, servicing this debt is consuming an increasingly large portion of federal revenue, shrinking fiscal space for social policies, infrastructure investments, or defense. Policies Under President Trump’s Second Term In 2025, President Donald Trump—returning to the White House for his second term—continued to sign into law a package called “One Big Beautiful Bill.” This package combines tax cuts and increased spending, with an estimated total cost of $3.4 trillion over ten years, further reinforcing Washington’s ongoing borrowing trend. To address the debt burden, Trump proposed several solutions: Tariffs: Expecting revenue from import taxes to help offset some of the deficit. “Golden Visa” program: Charging fees to wealthy foreigners to boost the budget. Stimulating economic growth: Aiming to improve the debt-to-GDP ratio. (DOGE): The Government Efficiency Department: focusing on cutting spending and waste. According to the White House, DOGE has helped reduce approximately $202 billion in costs, equivalent to $1,254.66 per taxpayer. However, compared to the total national debt, these savings are still very small. Currently, the average debt per American exceeds $108,000. Tariffs and DOGE: Limited Effectiveness Revenue from tariffs has increased significantly, from about $7 billion last year to $25 billion by the end of July. However, calculations show that $25 billion is less than 0.07% of the total public debt. Even if all current tariff revenues were used to pay down the debt, the US would need nearly 120 years to eliminate it. Meanwhile, debates continue over who truly bears the burden of tariffs—American consumers or foreign exporters. Warnings from Influential Figures Many influential voices have repeatedly warned: Jamie Dimon, CEO of JPMorgan Chase, called this “the most predictable crisis in history.” Ray Dalio, founder of Bridgewater Associates, likened this situation to an “economic heart attack.” Jerome Powell, Chair of the Federal Reserve, stated that the public debt issue requires a “mature and responsible discussion.” The White House responded that the debt-to-GDP ratio has decreased since Trump took office, and policies promoting growth, tax cuts, deregulation, and “fair” trade agreements will continue to improve the situation. White House representative Kush Desai also emphasized record revenue from tariffs. Conclusion Although the US government has implemented many measures to control public debt, the reality shows that the debt scale has far exceeded short-term efforts. With interest costs approaching $1 trillion annually and total debt continuing to grow, the US fiscal challenge remains unresolved. In the eyes of many experts, reversing this trend will require more difficult and decisive decisions than those made today.