The national debt just pierced $37.06 trillion as of July 5, 2025. That’s not a forecast. That’s locked and posted by the Treasury. The debt-to-GDP ratio now sits at 124%, with U.S. GDP projected near $29.8 trillion this year. That ratio passed post-WWII records and it’s showing no signs of turning.
This year’s deficit is already $1.36 trillion, and the Congressional Budget Office expects it to finish between $1.8 trillion and $1.9 trillion before September closes. No war. No stimulus. Just routine overspending. Washington calls it standard budgeting. The country is absorbing losses monthly.
Interest payments are swallowing everything. The Bureau of Economic Analysis pegs current annualized interest costs at $1.11 trillion. That tops defense. That tops Medicaid. That tops any discretionary item outside Social Security. Roughly 25% of all income tax revenue now goes to interest.
Yields on 10-year Treasuries climbed to 4.35% this week. Japan just sold off $78 billion in U.S. Treasury holdings. China shed $42 billion more. Fewer buyers. More auctions. The Federal Reserve steps in and props up what foreign buyers won’t. That’s not strength. That’s patchwork.
Spending isn’t slowing down. Democrats packed in $1.2 trillion for Medicaid expansion, food programs, clean energy subsidies and federal wage increases. Republicans countered with the One Big Beautiful Bill Act: $4.5 trillion in tax cuts and $1.4 trillion in added defense and infrastructure spending. Both parties signed the tab. No offsets. No clawbacks. Just scale.
The CBO estimates Trump’s bill alone will drive $3.4 trillion in added deficits over the next decade. Committee for a Responsible Federal Budget says the real figure may land closer to $3.9 trillion. That’s assuming no recession and flat interest rates. Reality bites harder than projections.
Americans are done watching. Pew’s June 2025 survey found 71% want a freeze on discretionary spending. Just 18% support new tax cuts without matching offsets. The public is asking for brakes. Capitol Hill keeps pressing the gas.
As Treasury floods the credit markets, borrowing costs spike across the board. Mortgages climb. Auto loans tighten. Small businesses get squeezed. When federal debt soaks up market oxygen, private investment chokes.
The spiral isn’t theoretical anymore. It’s visible. It’s repeating. Higher debt fuels higher interest. Higher interest feeds higher debt. The loop is locked. The pressure’s real.
And both parties are driving it.
Sources:
https://fiscaldata.treasury.gov/americas-finance-guide/national-debt
https://fred.stlouisfed.org/series/A091RC1Q027SBEA
https://www.cbo.gov/publication/61537
https://www.crfb.org/blogs/interest-costs-could-explode-high-rates-and-more-debt
https://tradingeconomics.com/united-states/government-bond-yield