The federal debt in America is rising, and financial analysts are warning that it could have a substantial impact on everyday Americans.
The U.S. national debt stands at 36.9 trillion today. While many Americans may not think about how the federal deficit affects their lives, America’s excessive borrowing can drive up interest rates and increase the risk of inflation.
Why It Matters
The federal debt plays a role in interest rates, which can have significant effects on the larger U.S. economy. If the government is forced to print more money to handle its debt, inflation can skyrocket for Americans as well.
U.S. President Donald Trump delivers remarks during a meeting with German Chancellor Friedrich Merz in the Oval Office at the White House on June 05, 2025 in Washington, DC.
Anna Moneymaker/Getty Images
What To Know
Concerns over the budget deficit have been increasing for Americans in recent years. A 2023 Pew Research survey found that 57 percent believed reducing the budget deficit should be a ‘top priority,’ a 12-point jump from just the year prior.
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, said not all deficits are bad, but America’s has surpassed that level.
“A government deficit often leads to a private sector surplus—meaning more money in the hands of consumers. That dynamic can work well as long as inflation stays in check and interest rates remain low, keeping the cost of servicing the debt manageable,” Thompson told Newsweek.
“Right now, however, the cost of servicing the debt has surpassed even the cost of funding our military—and it’s only getting worse as interest rates stay higher for longer.”
For the average American, the debt will likely be a “pain point” as investors demand a higher rate of interest on their economic debt, forcing mortgage rates higher.
“The tax debate is pivotal since the majority of government inflows come from those very taxes, and if we continue to lower taxes or keep them low, we won’t have the money to cover the outlays, which will invariably increase. This will have to be resolved with higher future taxes to bring down the deficit—effectively robbing the future to pay for today,” Thompson said.
With President Donald Trump in office, many are waiting to see how new Republican leadership could affect America’s looming debt pile.
In the Pew Research poll, Republicans were far more likely to prioritize reducing the debt at 71 percent compared to Democrats at 44 percent.
A more recent Gallup poll discovered that 53 percent of Americans say they worry about the budget deficit a “great deal” in March. Meanwhile, 28 percent said they worried about it “a fair amount.”
However, the debt is already likely hitting Americans’ wallets, said Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com.
“That grocery trip that used to run $100? We’re talking about losing $300 to $1,250 in actual buying power over the last few years,” Ryan told Newsweek. “It’s not just you, it’s not just inflation. It’s partly because when the government keeps borrowing money, it drives up prices for everything.”
Those looking to buy a house will also face higher mortgage rates as a result of the deficit, but fixing it would likely require higher taxes, according to Ryan.
“The job market will get tighter,” Ryan said. “When businesses have to pay more in taxes and deal with higher interest rates, they hire fewer people and give smaller raises. So even if you keep your job, that promotion or raise you’re hoping for? It will be harder to come by.”
Retirement accounts would also likely experience a “rollercoaster” as the government gets back on track.
“We’re basically stuck between a rock and a hard place. Keep ignoring the debt, and it slowly strangles everything. Higher prices, fewer opportunities, less money in your pocket,” Ryan said.
Trump’s One Big Beautiful Bill is predicted to add $2.4 trillion to the U.S. federal debt, likely exacerbating the concerns over interest rates and the larger economy.
“The Congressional Budget Office just confirmed that Donald Trump’s Big Beautiful Bill is, in Elon Musk‘s words, a ‘disgusting abomination,'” Sen. Elizabeth Warren (D-MA) said in a statement. “This independent analysis blows a hole through Congressional Republicans’ lies—this bill will rip health care away from millions of people and still jack up the debt to fund trillions in tax breaks for billionaires and billionaire corporations.”
When it comes to Americans’ views on Trump’s proposed tax cuts in the past, 52 percent said that the tax cuts in 2017 would increase the deficit in the long run because the government would take in a lot less money that it won’t be able to recover.
Meanwhile, 38 percent believed the tax cuts would decrease the deficit in the long run because they would stimulate the economy and bring in more money for the government, according to Gallup.
What People Are Saying
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “Government spending is contributing to our national debt as tax revenues and economic growth aren’t keeping pace with rising outlays, leading to increasing deficits over time.”
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “You know that feeling when looking at your credit card bill, wondering how you’re gonna dig out of this hole? That’s basically where we are as a country. And just like when you’re drowning in debt at home, we’ve got two main choices: make more money or spend less.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “The national debt is in many ways a phantom thief, as it slowly steals away buying power by being a key contributor to inflation over time even if Americans don’t physically see its effects. In past decades, the impact of the deficit was more muted, as relatively small amounts of additional funding were needed to keep the government functional. In recent years, however, this has escalated dramatically due to multiple wars, the Great Recession, and the pandemic which called for additional government spending.”
What Happens Next
As the debt continues to grow, future Americans may suffer, financial analysts warn.
“The longer-term implications may be dire for future generations, having to be saddled with monumental debts they cannot outrun and becoming a debtor nation,” Thompson said. “I know it sounds like some Orwellian nightmare, but if we continue down this path, this is the future we are destined to become. All once-great nations come to an end—it will just happen more quickly for the U.S. if this continues.”
For many Americans, it’s a situation of “the longer we wait, the more painful it will be,” Ryan said.
“The debt isn’t some abstract problem for future generations to worry about,” Ryan said. “It’s in your grocery bill today, your mortgage payment this month, and your tax return next year. And when we finally get around to dealing with it—and we will, because math always wins in the end—it’s gonna cost you even more.”