National debt explained: How does the $36.6 trillion debt impact taxpayers?
When President Donald Trump signed the One Big Beautiful Bill into law, it sparked major discussions on the outlook of the nation’s budget and the national debt.
When President Donald Trump signed the One Big Beautiful Bill into law, it sparked major discussions on the outlook of the nation’s budget and the national debt.
When President Donald Trump signed the One Big Beautiful Bill into law, it sparked major discussions on the outlook of the nation’s budget and the national debt.
President Donald Trump signed his One Big Beautiful Bill Act into law, on the future of the nation’s budget and the national debt.
The nonpartisan that estimates the law could add $3 trillion to the country's debt over the next decade, or about $300 billion a year.
Currently, the national debt stands at around $36.6 trillion.
How did we get here and how does the national debt impact taxpayers?
What is the national debt?
Every year, the United States government spends money on programs and services like Social Security and health care, while receiving revenue through methods like federal income taxes.
When the nation spends more money than it brings in during a given year, that creates a deficit. To pay for this deficit, the federal government borrows money by issuing Treasury bonds, bills and notes.
The national debt is the total amount of money the government has borrowed since the nation's inception.
How did we get here?
The national debt stands at as of July 18, 2025, according to the U.S. Treasury.
The debt dates back to the nation's inception, helping fund the Revolutionary War to World War II.
The 2008 global financial crisis and the COVID-19 pandemic were two major events that led to "big jumps" in the debt, according to Joseph Foudy, an economics professor at New York University Stern School of Business.
The nation's aging population is also putting a strain on programs like Social Security and health care.
Where is the money going?
A majority of government spending is going to Social Security, interest on the debt, health care, which includes Medicare and Medicaid, and national defense.
In 2024, the interest the government paid on its outstanding loans soared to $1.1 trillion.
"That's becoming a huge burden," Foudy said.
Is it possible to pay down the debt?
Aside from Social Security, health care, interest on the debt, and national defense, funding the rest of the federal government is only a fraction of spending, according to Foudy.
"If you closed every other branch of the federal government, research, Department of Education, Department of Energy funding, and everything else, it wouldn't close the deficit," Foudy said.
In theory, the government can balance its books by raising taxes or substantially cutting spending. Experts like Foudy suggest doing a bit of both.
Bringing in more revenue could look like letting tax cuts expire.
"It's just not simply sustainable to sort of fund our government with the level of taxes we have," Foudy said. "That's not on the average person, but particularly some of the tax cuts to the top earners."
Decreasing spending could mean cutting spending on major programs like Social Security.
"We're going to have to tweak that program that involves raising the retirement age, reducing some benefits, or maybe actually just increasing how much people pay and their employers pay in," Foudy said.
How does the national debt impact taxpayers?
If the debt continues to rise at a record rate, taxpayers will feel the impact, said Brett Loper, the vice president of policy at the , a nonpartisan organization focused on addressing the nation's fiscal challenges.
Paying off the nation's interest on the debt would make it harder for the country to invest in programs such as retirement programs, health care programs, research, and education, according to Loper.
The rising debt would also pressure the Treasury Department to divert funding from investing in a new company, startup, or small business, to selling off U.S. Treasuries, Loper said.
Since lending is tied to the Treasury rate, interest rates on loans for businesses, new cars, mortgages, and education will also increase.
"That's where it will really begin to squeeze the economy," Loper said. "And families at the household level will be able to really feel it as well."