America's $36 Trillion Debt Era: The Ripple Effects of Trump’s “One Big Beautiful Bill”

As of 2025, U.S. national debt has exceeded $36 trillion, setting a historic record. Amid growing concerns on Wall Street over the country’s fiscal deficit, the Congressional Budget Office (CBO) has issued a stark warning: the large-scale tax plan promoted by the Trump administration is projected to add an additional $2.4 trillion in debt over the next decade. Let’s take a closer look.

The Current State of U.S. Debt: Warning Lights Are Flashing

A Rapid Surge in Debt

U.S. National Debt Trend (Source: FRED)

As of May 2025, total U.S. federal debt stands at $36.21 trillion. The pace of this increase is alarming:

• Year-over-year: up $1.66 trillion (4.8% annual increase)

• Compared to five years ago: up $11.15 trillion (6.9% average annual increase)

• Compared to pre-COVID 2019: up 31%

Debt-to-GDP Ratio at Alarming Levels

The current U.S. debt-to-GDP ratio is around 122–124%, the highest since World War II. Historically, a ratio over 100% is considered a major red flag for fiscal sustainability. Even more concerning, the CBO forecasts this ratio to rise to 118% by 2035, indicating prolonged structural imbalance.

Mounting Interest Burden

As debt rises, so does the interest burden:

• Current average interest rate: 3.354% (up from 1.964% five years ago)

• Annual interest payments: $241.5 billion

• Interest as share of federal spending: 10.7%

Rising interest costs are putting pressure on the federal budget, crowding out other essential expenditures.

The Shocking Forecast of Trump’s Tax Bill

CBO’s Sobering Analysis

The CBO’s assessment of Trump’s so-called “Beautiful Bill” reveals some startling realities:

1. Fiscal Impact

   • $2.4 trillion added to the national debt by 2034

   • $3.75 trillion in revenue loss

   • Only $1.3 trillion in spending cuts—not enough to offset lost revenue

2. Social Consequences

   • An increase of 10.9 million uninsured Americans

   • Cuts to social safety nets like Medicaid for low-income populations

The Two Sides of Trump’s Tariff Policy

The Trump administration claims that tariff revenues can reduce debt, but the CBO tells a more complex story:

• Positive Effect

  • Tariffs could reduce the debt by $2.8 trillion

• Negative Effects

  • Inflation increases by 0.4%

  • Real GDP growth decreases by 0.6% by 2035

  • Concerns over retaliatory tariffs from trade partners

  • Long-term damage to the U.S. economy

  • Threat to fiscal sustainability

If current trends continue, the U.S. national debt could reach nearly $39 trillion by 2034. This scenario poses several risks:

• Crowding Out Effect: Excessive government borrowing could suppress private investment, dragging down economic growth.

• Debt-Interest Spiral: More debt → higher interest payments → more borrowing → more debt—a dangerous cycle.

• Credit Rating Downgrade Risk: Agencies like Moody’s and S&P may further downgrade U.S. Treasury creditworthiness.

Warnings from the Financial Markets

JPMorgan Chase CEO Jamie Dimon has warned that if this fiscal trajectory continues, the U.S. Treasury market could “crack.” Since 2008, the Treasury market has grown from $5 trillion to $29 trillion. A loss of investor confidence could prove catastrophic.

Political Conflict and Realistic Alternatives

Republican Party Divisions

Even Elon Musk—once a key Trump supporter—has called the bill a “disgusting abomination” and urged lawmakers to “kill the bill.” This highlights growing concerns about fiscal responsibility even within the GOP.

A Tough Road Through the Senate

Despite a narrow Republican majority (53–47), opposition from fiscal conservatives may block the bill. Just three GOP defections would be enough to defeat it.

Conclusion: America in the Brick of Choice

Trump’s tax plan may provide short-term economic stimulus, but in the long run, it could seriously undermine the U.S. economy’s sustainability. With the national debt already at $36 trillion, another $2.4 trillion in debt over the next decade could push the country toward a full-blown fiscal crisis.

The real choice facing the U.S. is not simply whether to cut taxes—it is whether to prioritize short-term political gains or long-term economic stability. History is full of examples of great powers that collapsed after losing fiscal discipline.

While the U.S. still holds the privilege of issuing the world’s reserve currency, that status is not guaranteed forever. The decisions made now will determine whether America remains at the center of the global economy in the 21st century.