The Blubber

America’s ballooning national debt—now topping $36.2 trillion—is increasingly drawing alarm from economists and credit rating agencies like Moody’s, which recently downgraded the U.S. credit outlook over concerns that economic growth won’t keep pace with mounting debt and interest obligations.

Experts have long criticized federal efforts to rein in the debt as inadequate and poorly timed. But the consequences of years of unchecked borrowing are now becoming harder to ignore, as once-steady confidence in the U.S. government’s fiscal trajectory begins to waver.

The fear is that as debt levels rise and interest payments eat up more of the federal budget, the economy won’t grow fast enough to offset the costs—threatening the long-term sustainability of U.S. finances.

Those concerns were underscored by Moody’s recent move to cut the nation’s credit rating from Aaa to Aa1. While the agency acknowledged the U.S.’s considerable economic and financial strengths, it warned that “these no longer fully offset the deterioration in fiscal metrics.”

The downgrade added to a growing stream of fiscal red flags—even as Treasury Secretary Scott Bessent downplayed the significance of Moody’s decision, insisting that markets should remain confident in the U.S. economy.

Still, some analysts are sounding the alarm. “Yesterday felt like we were somewhere along the line of a ‘death by a thousand cuts’ regarding the U.S. fiscal situation,” Deutsche Bank’s Jim Reid wrote in a note shared with Fortune. “Hard to know exactly where we are in that thousand, but we’re likely closer to the end than the beginning—even if markets brushed off the downgrade by day’s end. The loss of the last U.S. triple-A rating doesn’t cause an immediate shock, but it adds to the slow drip of troubling fiscal developments wearing down the dam of debt sustainability.”

Former President Trump and his administration aren’t ignoring the debt question. Trump has floated the idea of funding debt reduction through proceeds from his proposed ‘gold card’ visa program, while the Department of Government Efficiency (DOGE) continues to emphasize cost-cutting and streamlining.

Still, Trump’s broader platform strikes a delicate—and potentially contradictory—balance: promising to slash government spending while also cutting taxes, thereby reducing the very revenue needed to address the deficit.

His team is pushing Congress to pass what he’s calling a “big, beautiful bill” of tax cuts. Among the proposals are extensions to the 2017 tax cuts, set to expire at the end of 2025, as well as new provisions to eliminate taxes on tips and overtime pay.