The U.S. national debt has soared to a record high of $35 trillion. The figure shows how serious the problem is, with an increase of nearly $1 trillion in just seven months and about $2.35 trillion in the past year.

That translates to about $6.4 billion a day. The size of this debt is staggering and affects every American.  Each person’s share of the debt is about $105,000, which works out to about $266,000 per household. The debt-to-GDP ratio (which compares the country’s total debt to its economic output) currently stands at 121.7%.

This means that the total debt of the United States exceeds the output of its entire economy in one year. The Congressional Budget Office (CBO) predicts that this total debt could exceed $56 trillion by 2034, and the federal deficit could reach $22 trillion from 2025 to 2034.

Interest payments a concern

The growing national debt has brought with it rising interest payments, which have become the fastest-growing component of the federal budget. This means more taxpayer money is going to service the debt rather than funding essential services like education, health care or infrastructure.

Federal Reserve Chairman Jay Powell said the United States is "on an unsustainable fiscal path," adding that debt is growing faster than the economy itself.

Credit rating agencies have taken notice. Moody’s Investors Service and Fitch Ratings both downgraded their outlooks for U.S. debt. They cited concerns about a deteriorating fiscal situation and worries that the debt ceiling will lead to an endless debate. The downgrades could lead to higher U.S. borrowing costs, making debt management more expensive.

The ballooning national debt has sparked a fierce political debate. In Washington, the debate over how to address the problem is heating up, but a clear solution remains elusive.

Politicians have talked about cutting spending or raising taxes, but concrete plans are scarce, and many candidates have offered few specifics on how to address the issue. The American public is increasingly aware of the national debt, and many are concerned about its impact on future generations. Of course, many people are uneasy about the thought of their children and grandchildren inheriting a huge financial burden. This puts pressure on lawmakers to find sustainable solutions.

Is Bitcoin a potential solution?

Some supporters believe that Bitcoin can solve the US debt crisis. As we know, the supply of Bitcoin is fixed and can be used as a hedge against inflation.

As the U.S. government continues to borrow and spend, Bitcoin’s appeal as a store of value could grow, protecting savings from depreciation and providing a way to diversify a portfolio.

There are also expectations that the U.S. government might build up a Bitcoin reserve, particularly among Republicans, though the idea has yet to gain widespread support.

Bitcoin may even boost economic growth and encourage fiscal discipline by offering an alternative to traditional monetary policy. However, these ideas remain largely theoretical. Bitcoin’s volatility and the regulatory challenges it faces make it a risky proposition. While some see it as a possible solution to the debt crisis, others warn that it’s not a panacea. As a result, the debate over Bitcoin’s role in the U.S. economy continues, with no clear consensus yet.
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