America


Out-of-Control Federal Defi cit Faces Funding Calamity


Investors fear U.S. debt may be too large and too risky.


T BY MERRILL MATTHEWS


he united states has a mas- sive federal debt that’s grow- ing quickly. Because U.S. Treasury


securities mature at diff erent times (between one month and 30 years), investors must repeatedly step up and buy more Treasurys to replace the ones that matured. So far, the United States has been


able to fi nance its overspending by sell- ing its debt. But what if the day comes when other countries or U.S. compa- nies are no longer willing to lend the country their money? That shift may not be far off .


SIZE OF PROBLEM As of March 2026, the gross federal


10 NEWSMAX | MAY 2026


debt was $39 trillion. About $31 trillion of that is held


by the public, which is about the size of the total U.S. gross domestic product.


Another $7.6 trillion is intergov- ernmental debt, such as the money borrowed from the Social Secu- rity and Medicare trust funds and replaced with IOUs. That debt is growing fast because


the federal government spends much more than it takes in every year. The 2025 federal defi cit was $1.78


trillion, only slightly lower than $1.83 trillion during 2024, President Joe Biden’s last year in offi ce. And while the defi cits in 2022 and


2023 were a little lower, the defi cit for the last year of President Donald Trump’s fi rst term (2020) was $3.14 trillion, and the fi rst year of Biden’s presidency (2021) was $2.77 trillion — both related to increased pandem- ic spending.


The Trump administration


has promised to reduce the annu- al defi cits, but the Congressional Budget Offi ce doesn’t think that will happen. It’s predicting that, under cur-


rent law, over the next 10 years, the annual deficit will grow from $1.85 trillion in 2026 to $3.1 tril- lion by 2036, leaving the country with a $56 trillion debt. And that’s before we face the fi nan- cial fallout from the war with Iran and its aftermath. While Trump and his advisers sug-


gest that tariff s will cover the budget gap, the numbers just aren’t there; tariff s raised about $175 billion in 2025, and the defi cit was still 10 times that fi gure. And it’s not just the U.S. While


U.S. government debt is about 123% of GDP, Japan’s is 199%, and several large economies have federal debt close to 100% of GDP.


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