There's a growing concern among investors that demand for U.S. Treasury bonds may diminish, leading to potential higher borrowing costs for the government. Elevated interest payments could reduce funding available for various government programs, from national parks to infrastructure projects.

Political disputes over government spending exacerbate this concern. Earlier this year, Fitch Ratings downgraded the U.S. credit rating from AAA to AA+ due to recurrent political standoffs and last-minute resolutions related to the debt limit. Moody's recently indicated that a potential government shutdown would negatively impact the U.S.'s credit rating and highlight weaknesses in institutional and governance strength.

However, the U.S. is not alone in facing this issue, nor does it have the worst position among developed countries. The fundamental problem is straightforward: the federal government consistently borrows trillions of dollars annually to meet its obligations because tax revenues fall short of covering the expenses of numerous government agencies and programs.

This debt continues to rise as yearly budget shortfalls accumulate. As of this month, the total national debt stands at $33 trillion, approximately 124 times larger than it was 70 years ago.

Historically, the situation wasn't as dire before the 2000s because the economy, measured by gross domestic product (GDP), expanded at a rate comparable to or faster than the growth in debt. This alignment ensured that tax revenue would keep pace with debt servicing costs.

However, the current challenge lies in the fact that debt is expanding at a swifter rate than the economy. About a decade ago, the federal government's outstanding borrowings surpassed the annual GDP, signifying that even dedicating an entire year's economic output to debt repayment wouldn't suffice.

The debt-to-GDP ratio, a key indicator of fiscal sustainability, reached its peak during the COVID-19 pandemic. The government borrowed substantial sums to support the pandemic-hit economy. Although this ratio has receded slightly, the total federal debt still amounts to 120% of GDP, according to the Office of Management and Budget.