This is taken from a non-profit foundation on this concept. You can look at this on the web with graphs. This explanation gives a good partial explanation of a concept that is much more complicated than what is expressed here. Website   pgp.org/our-national-debt/

NATIONAL DEBT PETER G PETERSON FOUNDATION

America’s fiscal health and economic strength are closely linked. The national debt is also an issue of fairness for the next generation. Young Americans will be saddled with the weight of decisions made by those that came before them, unless thoughtful, forward-looking fiscal decisions are made to strengthen the country’s economic future. A strong fiscal foundation creates conditions that encourage broad-based economic growth: an environment with greater access to capital, increased public and private investments, enhanced business and consumer confidence, and a solid safety net. In turn, those factors improve the lives of Americans by supporting a vibrant economy with rising wages and greater opportunity, productivity, and mobility.

Our Current Fiscal Path

Debt is projected to continue to rise because there is a structural mismatch between spending and revenues.

The national debt is nearly as large as the entire U.S. economy and is projected to exceed its record high relative to the size of the economy in just 4 years, according to the Congressional Budget Office (CBO).

Federal debt is on an unsustainable path

Debt Held by the Public (% of GDP)

Why is the nation’s debt rising so dramatically? There is a fundamental imbalance between spending and revenues that will continue to grow in future years. CBO anticipates that federal spending will rise from 23.3 percent of GDP in 2026 to 27.9 percent in 2056. Revenues also are projected to increase during that period, but more slowly — from 17.5 percent of GDP in 2026 to 18.8 percent in 2056 — which means deficits will continue to rise in the decades ahead.

The growing debt is caused by a structural mismatch between spending and revenues

Federal Spending and Revenues (% of GDP)

Key Drivers of the National Debt

What is causing the growth of our national debt?

There are three primary drivers of the overall growth in spending: America’s aging population, rising healthcare costs, and rapidly escalating interest costs. Significant growth in those categories is combined with a tax system that is not designed to collect enough revenues to fund the promises that have been made.

Spending for major healthcare programs and Social Security will continue to climb

Federal Spending (% of GDP)

1) Aging Population

Over the next 25 years, the major driver of rising long-term federal spending is the aging of America’s population, as the number of people 65 or older will increase much faster than the working-age population, leading to increases in spending on programs for retirees.

In previous sections this site talked about how important immigration is to balancing our lack of younger workers.

The population of those 65 or older will continue to expand

Share of the population 65 or older (%)

The first wave of the baby-boom generation has already reached retirement age. Americans are living longer, on average, which means that seniors will spend more years in retirement. In the coming decades, those factors will add substantially to the number of people supported by programs targeted to older Americans, such as Social Security and Medicare.

2) Rising Healthcare Costs

The rising cost of healthcare in the United States is a key driver of the national debt. CBO’s projections anticipate that the federal government’s spending on major healthcare programs, such as Medicare and Medicaid, will climb from 6.0 percent of GDP in 2026 to 8.1 percent in 2056. Additionally, the Centers for Medicare & Medicaid Services note that total healthcare spending from all sources will grow to reach one-fifth of the entire economy.

On a per capita basis, the U.S. healthcare system is the most expensive among other wealthy countries. Yet, America’s health outcomes are generally no better than those of our peers, and in some cases, are worse, including in areas like life expectancy, infant mortality, asthma, and diabetes.

U.S. per capita healthcare spending is almost twice the average of other wealthy countries

Top 14 Countries

USA	14,885
Switzerland	9,963
Germany	9,365
Netherlands	8,431
Sweden	7,841
Ireland	7,813
Australia	7,469
Belgium	7,317
Britain	6,747
Japan	5,790
Italy	5,160
Korea	4,797
AVERAGE	7,371

Why is our medical cost so high? It seems logical to just look at other countries’ systems and copy some of the ways they reduce costs. There has been discussion of a single payer system. Almost all other countries have some form of single-payer system. Maybe a hybrid system can be found. At least we should study this problem.

3) Rising Interest Costs

One of the most damaging effects of rising debt is the rapidly growing interest costs.

As the national debt grows and interest rates rise, the United States will spend more of its budget on the cost of servicing that debt — crowding out opportunities to invest in the economy.

Interest costs are set to become the fastest-growing part of the federal budget and will total $16.2 trillion in the next 10 years alone, according to CBO.

4) Insufficient Revenues

It would be one thing if the tax code were designed to fund all the promises made, but it is not. The U.S. tax system does not generate nearly enough revenues to cover federal spending.

Furthermore, our tax code is also overly complex, confusing, inefficient, and unfair. For example, it remains riddled with tax expenditures or “tax breaks” that provide financial benefits to specific activities, entities, and groups of people. Those tax breaks, which totaled nearly $2.2 trillion in 2025, increase annual deficits and can create market distortions that damage economic growth and productivity.

Tax expenditures cost more than any individual government spending program

Budgetary Cost in 2025 (Billions of $)

Total Tax Breaks	2,220
Income Tax Revenues	3,108
Social Security	1,581
Medicare	997
Defense	917

Revenues 3,108  versus rest    5,715   =  – 2,607  

              This is -2.607 trillion dollars. Economic Impact

The above list does not count many other line items in the federal budget.

A strong fiscal foundation is essential for a growing, thriving economy.

Putting our nation on a sustainable fiscal path creates a positive environment for growth, opportunity, and prosperity. With a strong fiscal foundation, the nation will have increased access to capital, more resources for future public and private investments, improved consumer and business confidence, and a stronger safety net.

However, if policymakers fail to act, the opposite is also true. If the country’s long-term fiscal challenges remain unaddressed, the economic environment will weaken as confidence suffers, access to capital is reduced, interest costs crowd out key investments in our future, the conditions for growth deteriorate, and our nation is put at greater risk of economic crisis. If the long-term fiscal imbalance is not addressed, our future economy will be diminished, with fewer economic opportunities for individuals and families and less fiscal flexibility to respond to crises.

Greater Risk of a Fiscal Crisis

If investors lose confidence in the nation’s fiscal position, interest rates on federal borrowing could rise. A rapid increase in Treasury rates could be accompanied by higher rates of inflation, which would reduce the value of outstanding government securities and result in losses by holders of those securities — including mutual funds, pension funds, insurance companies, and banks — which could further destabilize the U.S. economy and erode confidence in U.S. currency on an international scale.

Reduced Public Investment

As the federal debt mounts, the government will spend more of its budget on interest costs, increasingly crowding out public investments that are critical to economic growth. Right now, the United States spends over $2.8 billion per day on interest payments.

Over the next 10 years, CBO estimates that interest costs will total $16.2 trillion. Within 30 years, CBO projects that interest costs will be the largest federal spending “program” and would be nearly three times what the federal government has historically spent on R&D, non-defense infrastructure, and education combined, programs generally seen as worthy investments in our future.

Less Affordable Cost of Living

Rising debt can lead to increased borrowing costs for the federal government. Federal borrowing rates have broad implications for the nation’s economy, and rising interest rates can directly impact the pocketbooks of American workers and families. According to the Budget Lab at Yale, a permanent primary deficit increase of 1 percent of GDP can reduce the annual household purchasing power by $300 to $1,250, shrinking families’ disposable income as more funds are eaten up by household necessities. Higher borrowing costs can also increase families’ mortgage costs, car loan payments, and federal interest rates for college.  

Challenges to National Security

Our fiscal security is also closely linked to national security and our ability to maintain a leading role in the world. As Admiral Mullen, former Chairman of the Joint Chiefs of Staff, put it: “The most significant threat to our national security is our debt.” As the national debt grows, not only are we more beholden to creditors around the globe, but we have fewer resources to invest in our strength and security.

Imperiled Social Programs

America’s high debt also jeopardizes the safety net and the most vulnerable in our society. If our government does not have the resources and stability of a sustainable budget, those essential programs, and the individuals who need them most, are put in jeopardy.

Diminished Economic Opportunities for Americans

Our growing debt also has a negative impact on the incomes and economic opportunities available to every American.

When high levels of debt crowd out private investments, businesses utilize fewer assets, which translates into lower productivity and, therefore, lower wages. On the other hand, reducing federal borrowing has positive effects; according to CBO, income per person could increase by as much as $6,300 by 2050 if we were to reduce our debt to 79 percent of the size of the economy by that year.

Fewer education and training opportunities stemming from lower investment would leave workers with fewer skills to keep up with the demands of a more technology-based, global economy. Faltering support for research and development would make it harder for American businesses to remain on the cutting edge of innovation, which would hurt wage growth. Furthermore, slower economic growth would have a negative compounding effect as lower incomes lead to smaller tax collections, which put the federal budget further out of balance, making our fiscal challenges even worse.

Take Action

We all have a stake in America’s future.

The good news is that this problem is solvable. We can choose a better path — a path of stabilized debt, faster economic growth, broader prosperity, and enhanced economic opportunity and mobility.

To get involved, it’s important to understand the facts. Learn more about how the national debt relates to issues important to Americans and some of the policy options available to lawmakers. If you want help putting the latest developments in context, sign up for our email newsletter, or follow us on Facebook, X, YouTube, or LinkedIn.

Your Senator and Representative need to know that the fiscal challenge is something you care about. Here is a suggested email message:

“I am concerned about America’s long-term fiscal outlook. I am seeking your commitment to working on solutions to our national debt, which will lead to a stronger economy, now and in the future. We need action now to begin to stabilize our long-term debt, in order to help the economy grow, keep taxes low, and protect vital programs and priorities for our country.”

Find your Senator’s contact information or your Representative’s contact information.

What the government is doing under Trump’s direction is accelerating the problem severely. The war in Iran just added 1 trillion to the debt. Trump claims a much lower number. American Think Tanks say that it is much higher, over a trillion. The Iran-US MoU gives Iran an additional 300 billion or .3 trillion.

This is like a child being given a credit card by parents who do not pay attention to the expenditures.

The child is Trump! The parents are American citizens! Contact your Senators.