Is the U.S. Economy Able to Survive a $37 Trillion Debt Bubble?

A curious paradox exists in modern economic reporting: rising consumer debt is often presented as a sign of economic confidence. Analysts and media outlets frequently cheer as households borrow more, framing it as a signal of optimism and a willingness to spend. However, a closer look at the data reveals a far more troubling reality. The United States has built an economy on a foundation of consumption financed by debt, and the system is showing alarming signs of strain.

The sheer scale of the national debt has become a clear and present danger. In recent months, the national debt quietly surpassed an astonishing $37 trillion. The speed of its growth makes the problem undeniable, with a new trillion dollars added in a matter of months. This rapid expansion is a symptom of a system where debt is not an exception, but a core component. The federal government continues to spend hundreds of billions every month, with no end in sight. To put the number into perspective, if the bill were to come due, the debt would amount to over $108,000 for every single U.S. citizen.

The cost of servicing this immense debt is now a major burden on the federal budget. Interest payments alone have already surpassed $1 trillion for the current fiscal year, making it one of the government’s biggest expenses, larger even than the defense budget or Medicare. As economists have long warned, when a nation’s debt-to-GDP ratio exceeds a certain threshold, economic growth slows significantly. With the ratio now well over 120%, the debt is no longer just a financial problem; it is actively dragging down the economy.

The crisis is not confined to government finances. Cracks are also appearing across the private sector. The first seven months of 2025 saw a surge in corporate bankruptcies, marking the worst stretch since the aftermath of the Great Recession. Years of cheap borrowing have left many companies heavily indebted, and with interest rates now higher, these weaknesses are being exposed. This rise in failures is not just a business story; it is a clear signal that the financial stress is widespread.

Households, too, are struggling under the weight of excessive debt. Americans collectively carry over a trillion dollars in revolving debt, primarily on credit cards with punishingly high interest rates. While subprime borrowers have been hit the hardest, even those with excellent credit are starting to fall behind on payments, a troubling sign for an economy so reliant on consumer spending.

This widespread debt poses a critical dilemma for the Federal Reserve. Cutting interest rates to provide relief to debtors would risk igniting a new wave of inflation. Conversely, keeping rates high to fight inflation could trigger a cascade of defaults and a severe recession. This no-win situation points to a potential period of stagflation—low growth coupled with persistent inflation. For individuals, this is a direct threat to purchasing power and financial security. As the demand for U.S. government debt wanes, central banks may eventually be forced to print more money, further devaluing the currency.

The debt bubble will not last forever. While a political solution appears unlikely, individuals have the power to protect themselves. In an era of currency debasement and financial instability, history shows that precious metals like gold and silver have remained a reliable way to preserve wealth. The choice to prepare lies with the individual, as sound money may be the only true protection when the debt bubble finally bursts.