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Thu, 20 Aug 2026

Thu, 20 Aug 2026 Why the US economy is ringing alarm bells

The US hit a debt milestone this week, but just how worried should we be about the world's largest economy?

* It took almost 200 years for America's national debt to reach $1 trillion for the first time in 1981, but the interest payments on the current debt are already higher than that amount.
* The debt has doubled since 2016, with the figure rising by about $90,000 every second or $7.8 billion a day.
* Long-term interest rates in the US are at multi-decade highs due to concerns about inflation and government borrowing.
* Interest payments on government debt are now 15% higher than last year and almost 20% of tax revenue, with economists warning that this could lead to a vicious cycle of increasing borrowing costs.
* The US is nearing its $41.1 trillion debt ceiling, with debt forecast to climb to about $64 trillion by 2036 according to the Congressional Budget Office.
* Economists warn that the situation is not yet critical but is getting close, with the impact of high interest rates and government borrowing likely to be felt by households and consumers in the form of higher mortgage, auto loan, and credit card rates.
* The US's position as the world's largest economy and the dollar being the world's reserve currency gives it a "much longer runway to fiscally misbehave" than other countries, but economists warn that investor appetite for lending to the government is diminishing.