If Congress does nothing — by that, it is meant does not make any changes to existing law — and the $36.2 trillion national debt will spiral up to close to $53 trillion by 2034, according to a 2024 estimate by the White House Office of Management and Budget (OMB). That’s another $17 trillion, and optimistically assumes no wars or recessions.
This will be the case even if the current legislation to extend and expand the 2017 Trump tax cuts were to somehow be defeated or mitigated to include another $2.3 trillion of spending cuts — say, by enacting the DOGE cuts of $175 billion or so every year — to keep it deficit neutral over the next decade.
In other words, tax bill or no tax bill, DOGE cuts or no DOGE cuts, the debt is basically expected to rise by another $17 trillion over the next decade.
So, who’s going to buy all those treasuries?
Foreign central banks have been reducing their overall share of the national debt: In the Dec. 2008, foreign central banks and financial institutions owned $3 trillion out of the $9.9 trillion national debt, or 30.8 percent. In March 2025, that was up to $9 trillion but now out of $36.2 trillion, down to 24.98 percent.
As a result, the Federal Reserve has increased its share of the debt from $790 billion in Aug. 2007 when the global financial crisis began, or 8.8 percent of the then $8.9 trillion national debt, to now $4.2 trillion, or 11.6 percent of the $36.2 trillion debt.
Additionally, the current $7.3 trillion of debt held by the Social Security, Medicare and other trust funds is also a dwindling share of the debt, from $4.3 trillion out of $9.9 trillion in Dec. 2008, or 43 percent, to 20.1 percent of the $36.2 trillion debt.
That leaves U.S. financial institutions, retirement funds, hedge funds, mutual funds and the like to buy the rest of the treasuries, rising from about 17 percent in 2008, or $1.7 trillion, to $15.6 trillion, or 43.2 percent. That number just keeps going up and up. In 2023, it was 38 percent.
Mind you, that came even with Congress instituting budget sequestration in return for increasing the debt ceiling in 2023. At $1.5 trillion, it was nominally one of the largest spending cuts in Congressional history, seconded by the 2011 budget sequestration of $917 billion. And yet it barely made a scratch in terms of the fiscal trajectory the nation is on.
Setting aside some of the government’s rosy debt scenarios, in reality, the national debt has grown by an average 8 percent a year since 1980 once wars and recessions are factored in. If it continues growing at that rate, it will top $74 trillion by 2034, and $100 trillion by 2038.
In the meantime, the U.S. economy has only grown by
That’s just “normal” rate of roughly doubling the debt every decade.
But it’s the same problem, whether there is an additional $17 trillion or $38 trillion of new debt that has the be financed, it will all have to come out of the same place, increasingly that of U.S. financial institutions and the Federal Reserve.
It’s a dire fiscal outlook, and recently prompted Moody’s to downgrade U.S. debt in May, stating “This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns. Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs. We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent, large fiscal deficits will drive the government’s debt and interest burden higher. The US’ fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.”
Moody’s is right, of course, nothing currently under consideration — whether the 2023 sequestration, the current schemes of continuing resolutions and omnibus bills, the current budget baseline or the budget reconciliation plan that carries forward current tax law — really does much to change the current trajectory. Congress is damned if it does, and damned if it doesn’t — and U.S. banks and taxpayers will be the ones left with the bag at the end of the day.
Robert Romano is the Executive Director of Americans for Limited Government Foundation.
