US Debt Hits $39 Trillion: Budget Watchdog Warns of Impending Financial Crisis

The U.S. national debt has exceeded $39 trillion, leading to increased calls for targets on government borrowing. Budget watchdogs are warning of the increasing instability of the nation's fiscal trajectory. Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), appeared before the House Budget Committee to argue why the government, now or in the future, should commit to a benchmark of a deficit-to-GDP at 3%.

According to the St. Louis Fed, that figure currently stands at 6%, meaning the government must either significantly curb its spending or meaningfully grow the economy if it wants to bring the balance into closer equilibrium.

The Congressional Budget Office (CBO) confirmed earlier this month that the Treasury added another $1 trillion to the federal deficit in the first five months of the year. The monthly budget review from the CBO, updated to February 2026 and released in the second week of March, showed that the government is estimated to have borrowed $308 billion last month alone.

MacGuineas emphasized the need for a "course correction" in the federal budget. The figures attached to the national debt are eye-watering, demanding bold action.

By 2036, the White House will need to rustle up more than $2 trillion a year to pay the interest on its national debt burden, equivalent to approximately 5% of the nation’s entire economy, according to estimates from the CBO. This underscores the urgency of addressing the country's fiscal situation.

MacGuineas said the severity of the U.S. fiscal situation “calls for bold action and making the necessary tradeoffs to reform entitlements, secure federal trust funds, reduce spending, raise revenue, and put in place other reforms and efficiencies that reduce deficits.”

MacGuineas highlighted that six forms of fiscal crises are becoming all the more likely if the U.S. continues to borrow at pace, without the economy growing quickly enough. These include a financial crisis, an inflation crisis, an austerity crisis, a currency crisis, a default crisis, and a gradual crisis.

Among the potential crises is a financial crisis, where a lack of confidence in U.S. Treasuries leads to panic among traders and a spike in interest rates, a concern which JPMorgan Chase CEO, Jamie Dimon, has already highlighted.

MacGuineas added: “Simply put, there is no silver lining in this trajectory.” She acknowledged that the country is in a period of alarmingly high debt levels despite a growing economy and several demographic challenges ahead. The warning is based on the need to take steps to reduce unsustainable borrowing.

Texas Republican Rep. Jodey Arrington, chairman of the House Budget Committee, pointed out that it had taken 200 years for the national debt to hit $1 trillion, a figure that is now paid out annually in interest payments alone.