The U.S. national debt continues to grow, raising concerns about its impact on the country’s economy and future. As of 2025, the debt has crossed $34 trillion, driven by years of high spending and lower-than-expected revenue. While borrowing can help in times of crisis, continuous deficits raise questions about sustainability.
In this article, we’ll explore how the U.S. national debt affects key areas like healthcare, defense, and Social Security. We’ll also look at how budget priorities and tax reform efforts could help or hurt the long-term financial health of the country.
What Is the U.S. National Debt?
The national debt is the total amount the federal government owes to lenders. It comes from borrowing money to pay for expenses that exceed tax revenue. This debt is divided into two parts:
- Debt held by the public: Money borrowed from investors, banks, and other governments
- Intragovernmental debt: Money borrowed from government-run programs like Social Security
Each year, when the government spends more than it collects in taxes, it runs a deficit. That deficit is added to the national debt.
Where Does the Money Go?
Understanding where the federal government spends its money helps explain why the debt keeps rising. In 2025, total federal spending is estimated to be over $6.7 trillion. Here are the major spending categories:
Social Security
This is the largest government program, making up around 20% of federal spending. As more people retire and live longer, Social Security costs continue to rise. Without changes, experts predict that the program may not be able to pay full benefits by the early 2030s.
Healthcare
Programs like Medicare and Medicaid account for about 25% of federal spending. Medicare helps seniors, while Medicaid supports low-income individuals and families. These programs are growing quickly due to rising medical costs and an aging population.
Defense and Military
The U.S. spends more on defense than any other country. In 2025, about 13% of the budget goes to defense and national security. While military spending has been steady, it still represents a large portion of the budget.
Interest on the Debt
As the debt grows, so do the interest payments. This year, interest payments could reach 10% of the federal budget. That means more tax dollars are used just to pay for past borrowing, leaving less money for other needs.
Other Programs
The remaining budget covers things like education, infrastructure, transportation, and environmental protection. These areas often receive less funding because of the high cost of mandatory programs and interest payments.
How Debt Affects Key Government Services
Healthcare
As debt grows, the government may struggle to fund healthcare programs. Medicare and Medicaid could face cuts, affecting millions of Americans. Less money may also be available for new health initiatives, such as improving hospital systems or expanding mental health care. Rising debt can also increase borrowing costs, which limits funding for health research and innovation.
Defense
While defense spending remains high, growing debt could eventually force the government to make hard choices. It might delay new military technology or reduce troop numbers to save money. In a crisis, such as a war or international conflict, the government may have less flexibility to respond quickly if borrowing is limited.
Social Security
The Social Security Trust Fund is expected to run low in the next decade. If nothing changes, benefits may be reduced. Because of rising debt, the government may not be able to step in and cover shortfalls without adding more to the deficit. This puts future retirees at risk of receiving less than they were promised.
Revenue Sources and Tax Reform Proposals
To reduce the debt, the government can either spend less or collect more money. Most federal revenue comes from:
- Individual income taxes
- Payroll taxes
- Corporate taxes
- Excise taxes (on goods like gas and tobacco)
Broadening the Tax Base
One idea is to simplify the tax system by reducing deductions and closing loopholes. This could increase revenue without raising tax rates.
Wealth Taxes
Some lawmakers have proposed taxes on wealth, not just income. This would target the richest Americans. However, critics argue it may hurt investment and be difficult to enforce.
Corporate Tax Changes
Raising corporate tax rates or closing offshore loopholes could help reduce the deficit. But higher taxes might cause businesses to move jobs or profits overseas.
National Sales Tax or VAT
A value-added tax (VAT) is used in many countries to raise money. While it could bring in a lot of revenue, it might also affect low- and middle-income families more than the wealthy.
Is the National Debt Sustainable?
A key measure of debt health is the debt-to-GDP ratio. In 2025, it stands at over 120%, which means the country owes more than its total annual economic output.
If the economy grows faster than debt, the situation is manageable. But if growth slows or interest rates rise, paying off the debt becomes much harder.
Risks of High Debt
- Reduced investor confidence: Investors may demand higher interest rates or stop lending.
- Less room to respond to emergencies: In a recession or disaster, high debt makes it harder to borrow more.
- Higher inflation: Too much borrowing can lead to rising prices if not managed carefully.
- Slower economic growth: Government borrowing may crowd out private investment.
Options for Improving Fiscal Health
Spending Cuts
Cutting waste, reforming entitlement programs, and reducing unnecessary defense spending could help lower deficits.
Increasing Revenue
Modernizing the tax code, improving enforcement, and introducing new taxes could boost federal income.
Long-Term Planning
The government could adopt rules that limit how much it can borrow. It could also set clear goals for reducing the debt over time.
Growing the Economy
Policies that support job creation, education, and innovation can increase tax revenue naturally by boosting economic growth.
What Happens If Nothing Changes?
If current trends continue, the national debt could reach $50 trillion within the next 10 years. Interest payments alone could surpass defense spending. Programs like Medicare and Social Security may be forced to reduce benefits. The next generation may face higher taxes and fewer government services.
Public Awareness and Political Action
Solving the debt problem isn’t just about numbers. It’s also about making tough political choices. People want low taxes and generous programs, but that combination is not sustainable. Raising awareness and encouraging bipartisan solutions is key to long-term success.
Conclusion
The U.S. national debt reflects many years of choices about spending, taxation, and economic priorities. If left unaddressed, the debt could harm programs Americans rely on, from healthcare and defense to Social Security.
The good news is that it’s not too late. With thoughtful tax reform, better budget planning, and a focus on long-term sustainability, the U.S. can secure a stronger economic future. But action is needed—sooner rather than later.
Do Follow USA Glory On Instagram
Read Next – Political Polarization Is Fueling Political Violence
