The U.S. national debt has surpassed $39 trillion, exceeding the size of the entire U.S. economy for the first time since the end of World War II. Interest payments alone will exceed $1 trillion this year. Key figures: Total national debt approximately $39 trillion; debt-to-GDP ratio 100.2%, the first time since World War II; interest payments of $1.039 trillion in fiscal year 2026; annual deficit approximately $2 trillion; Congressional Budget Office projects debt will reach 175% of GDP by 2056; debt increases by $50 to $80 billion daily. Section 1—A Historic Milestone No One Celebrates In March 2026, the United States crossed a threshold never before breached in peacetime since the end of World War II. Government debt to external creditors—"publicly held debt," excluding debt to internal government trust funds such as Social Security—reached $31.27 trillion. Meanwhile, the U.S. nominal GDP for the past twelve months was $31.22 trillion. The debt-to-GDP ratio officially surpassed 100%. Maya MacGuineas, chair of the Committee on Responsible Federal Budget, bluntly stated, "It's happened—the U.S. national debt is now larger than the U.S. economy, roughly twice the historical average." According to data from the U.S. Treasury Department, as of May 18, 2026, the total U.S. national debt precisely reached $39,008,999,901,378.68. This figure increases by approximately $5 billion to $8 billion per day, with an average daily increase of about $7.5 billion over the past twelve months. The debt surpassed $1 trillion in 1981, $10 trillion in 2008, and $20 trillion in 2017, nearly doubling in the past eight years. Phillip Swagel, director of the Congressional Budget Office, issued a stark warning in February 2026: "Our budget projections continue to indicate that the current fiscal trajectory is unsustainable." Under the current legal framework, federal debt will surpass the historical peak of 106% of GDP set at the end of World War II in 1946 by 2030. It will reach 120% of GDP by 2036 and a staggering 175% by 2056. Educational Note: National debt is usually discussed in two ways. "Total government debt" includes all debts owed by the federal government, including debts to internal government trust funds such as Social Security. "Publicly held debt" refers to the government's debts to external creditors, namely investors, foreign governments, and financial institutions that purchase U.S. Treasury bonds. Currently, both indicators are at their highest peacetime levels. Section 2—Why is the Debt So Deeply Rooted? The U.S. debt problem did not erupt suddenly, but is the result of decades of structural choices—round after round of tax cuts without corresponding spending reductions, continuously increasing spending without corresponding tax revenue, coupled with the compounding effect of interest.A structural gap between government spending and revenue. Since 1970, the U.S. federal government has only achieved a budget surplus in four years, with deficits in all other years. Whenever government spending exceeds tax revenue, the shortfall is covered by issuing national debt. These bonds accumulate into debt, and the interest payments from the annual deficits further exacerbate the deficit. Three major categories driving spending growth. The federal budget has three dominant and continuously expanding centers of spending. Social Security spending reached $953 billion in the first seven months of fiscal year 2026; Medicare spending was $588 billion in the same period; and net interest payments on public debt reached $628 billion in the same seven months, exceeding the combined total of Medicare and Medicaid. These three categories of spending are structurally driven by an aging population, healthcare costs, and debt accumulation. The interest trap. This is the most worrying dynamic in the entire debt crisis. In 2015, the U.S. paid $223 billion in net interest on its debt; in 2020, $345 billion; in 2024, $881 billion; and it is projected to pay $1.039 trillion in fiscal year 2026—nearly tripling in just six years. Interest payments have become the third largest expenditure item in the federal budget, after Social Security and Medicare, and surpassing defense spending. The One Beauty Act—the latest accelerator. Signed into law in 2025, the One Beauty Act (OBBB) will permanentize the 2017 Trump-era tax cuts and add tax exemptions for tips and overtime pay. The Congressional Budget Office estimates the act will increase the fiscal deficit by $2.8 trillion over the next decade. The legacy of the pandemic. The two largest annual fiscal deficits in U.S. history both occurred during the COVID-19 pandemic: $3.1 trillion in fiscal year 2020 and nearly $2.8 trillion in fiscal year 2021. These loans remain on the balance sheet, incurring a continuous interest burden at rates far higher than when they were issued at near-zero interest rates. Educational explanation: A fiscal deficit is the annual difference between government spending and tax revenue. National debt is the cumulative sum of deficits over the years, plus all interest. To put it simply: if you spend $5,000 more than you earn each month and use a credit card to cover the difference, your monthly deficit is $5,000. Your total debt is your credit card balance. Section 3—Will America Really Go Bankrupt? The short answer is: America doesn't go bankrupt like a business or a family. The US government issues its own currency—the dollar—and theoretically can always create more dollars to pay off its debt. But this doesn't mean there won't be consequences.The ability to print money brings another risk: inflation. If the U.S. government massively increases the money supply to pay off its debt, the real purchasing power of every dollar in circulation will depreciate. Reinhart and Rogoff's insights. In their landmark study of over 800 years of financial crises, This Time Is Different: Eight Hundred Years of Financial Absurdity, Carmen Reinhart and Kenneth Rogoff found that debt crises often do not arrive gradually and predictably, but rather erupt suddenly from a collapse of confidence. The Cato Institute's framework—gradual, then sudden. The Cato Institute uses Hemingway's famous analogy of bankruptcy to describe the trajectory of American fiscal policy: gradual, then sudden. Rational market participants can see the unsustainability of the American fiscal trajectory from afar, and they continue to buy U.S. Treasury bonds—until one day they stop. What would a real fiscal crisis look like? A U.S. fiscal crisis wouldn't look like a company filing for bankruptcy, but more likely a sudden and sharp rise in long-term Treasury yields—investors demanding higher compensation to continue lending. The dollar's reserve currency status is both a buffer and a risk. More than half of the world's foreign exchange reserves are held in US dollars, creating structural global demand for the dollar and dollar-denominated assets. Educational Note: A reserve currency is a currency widely held by central banks and international institutions as a store of value and a medium of exchange for global trade. The US dollar accounts for approximately 58% of global foreign exchange reserves. Section 4—What This Means for Investors: The US debt problem is not a distant theoretical risk; it is already impacting financial markets and investor portfolios in tangible ways. A direct link to rising yields: In the second quarter of 2026 alone, the US Treasury will need to borrow $189 billion, $79 billion more than expected months earlier. Such a massive and continuously growing supply of government bonds can only attract sufficient buyers through higher yields. Crowding out of private investment: When the government borrows heavily, it competes with businesses and households for available capital. Increased government borrowing drives up borrowing costs for everyone—mortgage rates, corporate bond rates, auto loan rates, and credit card rates all rise. A self-reinforcing dynamic of compound interest. The most dangerous characteristic of the current trajectory is its self-reinforcing nature: the larger the debt, the higher the interest payments; the higher the interest, the larger the deficit; the larger the deficit, the more borrowing is needed. Moody's downgrade and its signaling significance. In May 2025, Moody's downgraded the US sovereign credit rating from Aaa to Aa1. Social Security solvency—the 2032 deadline.The CBO predicts that the Social Security Old Age and Survivors Insurance Trust Fund will run out of funds in 2032, a year earlier than previously predicted. If Congress does not act by then, benefits for all beneficiaries will be automatically reduced by approximately 28%. Section 5 – Since US debt is about to explode, why isn't anyone defusing the bomb? Solving the US debt problem is not arithmetically complicated, but politically almost impossible. The income-side dilemma: Federal government tax revenue has long been lower than spending levels. The expenditure-side dilemma: Meaningful deficit reduction must address three major spending categories: Social Security, Medicare, and debt interest. The growth theory: Some economists believe that strong economic growth is the most realistic path to reducing the debt-to-GDP ratio without explicit fiscal consolidation. Educational note: The "debt-to-GDP ratio" is a standard metric used by economists to assess a country's debt burden. It compares the total debt to the size of the economy, rather than looking at the absolute number. A US debt-to-GDP ratio exceeding 100% means that the debt exceeds the total annual output of the entire economy. Section 6 – Impact on Different Types of Investors: Stock Investors: The debt crisis has created a prolonged interest rate environment higher than the near-zero interest rate era of 2009-2022. This structurally suppresses high-valuation growth stocks that rely on low discount rates. Bond Investors: The US debt trajectory is a medium-term headwind for long-term Treasury bonds. Increased bond supply means downward pressure on prices and rising yields over time. Gold and Real Asset Investors: Historically, persistent fiscal deficits and concerns about currency devaluation have always been major drivers of gold demand. Singaporean and Asian Investors: Rising US yields attract capital outflows from emerging markets, putting pressure on Asian currencies and stock markets. All Investors: The most important practical implication of the current debt situation is that the ultra-low interest rate era prevalent between 2009 and 2022 will not be repeated. Section 7 – Honest Assessment: Crisis, Slow Burn, or Controlled Recession? There are three broad scenario paths for the US debt situation over the next decade: Scenario 1: Gradual Stabilization. Congress eventually implements substantial fiscal reforms. Scenario 2: Slow Burn. Debt continues to grow, interest rates remain high, and the potential growth rate of the economy remains under pressure due to government borrowing crowding out private investment. Scenario 3: A sudden collapse in confidence. At some point, enough bond market participants simultaneously conclude that the "trajectory is unsustainable," demanding a significant increase in yields or simply ceasing to buy.Investors' honest conclusion: The probability of an acute crisis in the next one to two years is low but cannot be ignored; the probability of a slow, agonizing scenario in the next five to ten years is considerably higher. The corresponding portfolio implications—leaning towards current earnings rather than long-term growth, shortening fixed-income duration, partially hedging inflation risk with real assets, and promoting geographical diversification to reduce concentration in pure dollar assets—are adjustments worth implementing now. Section 8—Key Developments Worth Watching: Congressional Budget Office report update, Treasury bond auction demand, Social Security Trust Fund forecasts, 30-year Treasury yield trends, bipartisan fiscal cooperation. Debt size is $39 trillion, increasing by $5-8 billion daily. Interest payments have exceeded $1 trillion for the first time this year. The debt-to-GDP ratio has exceeded 100% for the first time since World War II. BIT (formerly Matrixport) directly connects to licensed brokers for its US stock business, covering all US stock main board and ETF assets. Benefiting from over seven years of institutional service experience and compliance licensing, BIT has successfully bridged the boundaries between digital assets and traditional finance, helping investors quickly capture investment opportunities. [BIT]