$38 Trillion in Debt: Will the Bill Come Due for Uncle Sam?

Increasingly, the national debt is making headlines – especially given 2025’s heated debates about taxes, spending and the money it takes to keep the government running.

The numbers are almost unfathomable: As of Nov. 12, 2025, the U.S. government owed $38,121,217,149,187.64. (Yes, it’s tracked to the penny!) That’s up from $4.3 trillion in April 1993, a nearly ninefold increase. But before we panic, let’s ask: Is this a problem for investors?

DEBT IN CONTEXT: IT’S NOT JUST ABOUT THE RAW NUMBERS

Of course, a dollar today isn’t what it was in 1993. Adjusted for inflation, a 1993 dollar you might’ve spent on a Pearl Jam CD is worth about $2.23 in 2025. And the economy has grown too, more than doubling in real terms (meaning after inflation).

So while our debt has ballooned, so has our ability to manage it. (Think about it like this: You might have a whole lot more debt now as an adult with a mortgage than you did growing up in the last millennium, and maybe that’s OK.)

What really matters is debt relative to gross domestic product – the size of the economy. In 1993, debt was 64% of GDP. Today, it’s around 119%. That’s both quite an increase (almost double) and quite high by U.S. standards (it was around 30% as recently as the ’80s), but not unprecedented. After World War II, debt also topped 100% of GDP. And globally? Japan’s debt is around 230% of GDP, while the U.S. sits between Italy and France.

THE U.S. ISN’T GREECE

Remember the eurozone debt crisis, one of the many fun outgrowths of the global financial crisis? Countries like Greece faced economic collapse because they couldn’t print their own money to pay creditors. The U.S., by contrast, issues debt in its own currency and has one of the world’s most trusted central banks. In times of global turmoil, investors often flock to U.S. Treasurys. That doesn’t mean more debt is harmless. It just means we have more tools to manage it.

INTEREST PAYMENTS AND CROWDING OUT

As we head into the future, the threat of debt isn’t just about how much we owe – that huge, ever-growing headline number. It’s about how much we pay every month for the line of credit we’ve issued ourselves, a concept we’re all very familiar with now that mortgage rates have crawled out of the basement.

The 10-year Treasury yield is around 4.1%, up from pandemic-era lows. That’s roughly how much the government is paying on new 10-year bonds, aka loans. As debt grows and investors get more wary of continuing to loan more, the government may need to offer higher interest rates to attract buyers.

Rising rates + rising debt balance = rising payments. That’s money that could go to infrastructure, education or health care, but instead goes to paying off past borrowing. Economists call this “crowding out” – when debt servicing eats into productive investments, slowing economic growth.

WHAT IT MEANS FOR INVESTORS

The deficit (what the government takes in via taxes minus what it spends every year) continues to add to the debt load. As a fraction of GDP, it was 6.6% in 2024 and projected to be 6.2% in 2025.

A full-blown U.S. debt crisis is unlikely in the near term. (Indeed, some economists predict that higher deficits will stimulate the economy in 2026.) The government can raise taxes, cut spending or hope that the economy grows its way out of trouble. And the Fed’s credibility helps keep inflation expectations anchored. But here’s the unvarnished truth: Neither political party is seriously addressing the deficit. Without action, debt will keep rising, and so will the cost of maintaining it.

That said, despite the headlines, government bonds remain a key part of diversified portfolios. They offer lower volatility than stocks, reliable income and relative safety during market stress. As with most aspects of the economic sphere that you can’t control, the only good response is to stick to your plan and ignore the noise.