News Breakdown: America’s Debt Crisis

By Alexis Trifon 

As of July 2025, the U.S. national debt has surpassed $37 trillion. The US’s total GDP is an estimated $30 trillion.

Net interest payments on the debt are projected to reach over $800 billion this year, which is roughly the budget for defense and Medicare according to the Congressional Budget Office. Within the next decade, these interest costs are expected to overtake both defense and Medicare spending, becoming a massive federal expenditure.

But the deeper issue isn’t just fiscal—it’s systemic.

The U.S. has routinely run trillion-dollar deficits, borrowing to cover spending that outpaces revenue. Beyond our balance sheet, the real challenge is restoring confidence—in resilient U.S. markets, our strategic alliances, and global institutions at large. Without it, economic and geopolitical stability will erode.

Ray Dalio’s How Countries Go Broke captures this phenomenon perfectly: debt builds quietly until the system suffers an “economic heart attack.” 

This metaphor is particularly resonant because it captures the cost of delaying hard decisions. We’ve seen it repeatedly, including in 2023 and 2024, when Congress faced a budget crisis and narrowly avoided a government shutdown, only to pass short-term resolutions. The cycle repeats—and it’s inherently unsustainable.

Some argue that U.S. debt is manageable because the dollar remains the world’s reserve currency. That may be true today, but global reserve status is not guaranteed in the future. Even if bond markets remain calm, everyday Americans are growing uneasy, and with good reason. 

A system can run on borrowed time, but not on borrowed trust. Ultimately, a system’s legitimacy collapses when people lose faith in it. And when maintaining that system becomes too costly, it creates both immense risk and opportunity.

Three Fractures in the System and What They Reveal

1. Institutional

For decades, commercial liberalism drove economic prosperity through open markets and global trade. For a time, it delivered—fueling a surge in global GDP after World War II and ushering in capitalism’s “golden age.” But today, that era of interconnected growth is increasingly fragile. WTO negotiations have stalled, regional blocs are on the rise, and institutions that once fostered international cooperation now struggle to adapt.

There’s a cycle where:

→ Voters lose faith.

→ Leaders respond with rhetoric over reform.

→ Markets react with volatility and uncertainty.

→ Public trust erodes further.

→ Disengagement and frustration grow.

→ Confidence in institutions weakens.

With each turn, institutions become less capable of solving society’s problems. The cycle tends to persist until a strong leader or legislative reform emerges.

2. Fiscal

At its core, a healthy economy balances what it spends with what it earns. For years, the U.S. government has spent far more than it collects, relying on borrowing to bridge this gap. The result is a national debt now rivaling the size of the U.S. economy. Key drivers include rising costs of government programs and interest on its debt all while economic growth stalls.

3. Generational

Perhaps the most poignant fracture is between generations. Young people today inherit a system that feels broken, facing higher costs and fewer safety nets. Even as global wealth increases, access to stability—whether in the job market, education, or housing—has significantly declined.

Building Back: A Three-Layer Framework

As we look for ways to rebuild the “system,” it helps to think from a first principles perspective. America’s answers won’t come from a single fix, but from a comprehensive approach or stack. At the foundation, we need creativity: ideas and innovation that tackle problems. Layered on top is allocating and investing capital to fuel the growth of key industries. Finally, we need a renewed sense of national purpose—one that aligns Americans, businesses, and leaders around common goals.

Famous economist Milton Friedman once argued that freedom of exchange is the engine of prosperity. But as economist Dani Rodrik reminds us, markets only thrive when anchored by strong domestic institutions. The task then is grounding our idealism in resilience—creating structures that can adapt to change and succeed.

In this way, confidence is king. Through smart regulation and a culture of trust, America can attract the talent, capital, and innovation needed to power growth.

America’s Stack Reboot

Think about your phone: every app and service runs on a stack—a system where each layer supports the next. America’s future should be built the same way. Imagine a national stack where each layer—government, industry, and society—reinforces the others and furthers progress.

Energy will be a major catalyst for lifting people out of poverty and is central to our race with China for technological and economic dominance. Over the next 2–5 years, the race to deliver power capacity at speed and scale will define who leads. The U.S. is already feeling the strain: demand from AI, data centers, and electrification is surging. Electricity consumption is projected to grow at an average of 1.7% per year through 2026, with commercial and industrial sectors rising even faster (EIA).

China is rapidly expanding its clean energy capacity—renewables now make up around 25% of its total, compared to 21% in the U.S. as of 2023. Accelerating energy innovation and deployment has to be a national priority, with investments in domestic supply chains, grid-scale renewables, and advanced semiconductors.

To meet this moment, our approach to infrastructure must evolve. The U.S. already blends public and private investment—through partnerships and different funding models. Now is the time to expand on those strategies, while also leveraging new financing and taxation tools if necessary.

Leadership will be key in this shift. We need an operator mindset in policy—leaders who prioritize execution. Government bureaucracy should be streamlined, with faster, more adaptive avenues to tackle problems.

The Path Forward

If there’s any silver lining to today’s fiscal and institutional challenges, it’s this: we have a clear call to rebuild. The decisions we make now will deeply influence and shape our future.

America’s strength has never been about perfection; it’s about the drive to adapt, innovate, and keep going. While the system may age, the promise of renewal—and overall resilience of the U.S.’s democracy and economy—remains unwavering.