Public Debt: America’s Final Blow?
Professor Ahmed Majzoub Ahmed Ali
Did you know the US economy, widely regarded as the world’s largest in size and influence, faces a genuine financial crisis that could threaten its global standing and ranking? This crisis has two main dimensions: the mounting – or, more accurately, spiralling – US public debt, and the growing inability to meet the costs of Social Security, whose annual expenditure amounts to US$1.6 trillion.
According to the latest report issued in 2026, US public debt has reached US$40 trillion. To put this into perspective, imagine that the US Treasury decided to repay one billion dollars every single day. It would take 111 years to pay it off!
Even worse, the US Treasury is repaying maturing debt by issuing new debt. In 2025, the Treasury announced 444 auctions of Treasury bills and bonds, through which it refinanced US$9.1 trillion in maturing securities and borrowed a further US$1.9 trillion. This indicates the scale of the financial problem confronting the US government.
The second recurring challenge is servicing the interest on the debt, which is expected to reach US$1 trillion by the end of 2026, equivalent to US$2.7 billion a day! The Congressional Budget Office expects interest payments to double in 2026.
What further confirms the growing severity of the crisis is that the US government has no plans to repay its debt principal. Instead, it is considering how best to manage it to ensure interest payments are met and preserve its ability to issue new debt instruments.
Even this option, however, is far from straightforward, as it depends on external factors beyond the US government’s control. These include continued investor confidence in US Treasury securities, which is essential to ensuring they keep purchasing Treasury bonds and bills. The country’s ability to manage its debt also depends on the dollar retaining its position within the international monetary and financial system. This enables it to remain widely accepted for settling claims and meeting financial obligations, while encouraging governments and institutions to hold it as a store of value.
In addition, a key domestic factor is the US economy’s continued ability to generate revenue and sustain economic growth, enabling the government to meet maturing debt obligations and pay interest due.
Experts and economists are calling all these factors into question, particularly in light of China’s continued development and emergence as a major global economic power. China has mastered advanced technologies and secured competitive advantages that the US economy does not possess. An even more influential factor is the emergence of new economic groupings and blocs, such as BRICS, which represents considerable demographic weight and economic strength, alongside numerous advantages enjoyed by its member states that are not replicated in the US economy. Added to this is the expanding influence of certain emerging economies, particularly Türkiye and India.
America’s financial position is further aggravated by the Social Security funding deficit. The gap between contributions made by beneficiaries and the annual expenditure required to meet their entitlements continues to widen significantly. This growing financial shortfall points to an increasing inability to fulfil the obligations owed to beneficiaries under Social Security funds and programmes.
This helps explain why the US government reassessed its strategy in 2025, reorganising its priorities and placing domestic concerns first. It can no longer afford to continue playing the role of the world’s policeman. Perhaps America’s position towards its allies during the war against Iran provides further evidence of how its financial constraints affect its ability to respond to the demands of countries dependent on its support or allied with it.
The pace of America’s relative decline continues to accelerate, and new powers may emerge, potentially restoring a measure of balance to international relations.
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