America's $38 Trillion Debt Crisis — It's Spiraling Out of Control

The U.S. government has reached a new milestone in this debt crisis I want to show you. So this is straight from the U.S. Treasury's website. The federal government is now in debt by over $38 trillion. They added $1 trillion of debt in just two and a half months. So I want to show you how the U.S. government did in 2025 compared to prior years. But you have to remember that the U.S. government does not operate on a calendar year. They don't go from January 1st to December 31st. No, they operate on a fiscal year which ends on September 30th. Okay, so for fiscal year 2025, the U.S. government overspent by $1.78 trillion. Now that's actually a little bit better than last year's deficit of $1.83 trillion. So maybe there's hope. Maybe we should be optimistic and we can make the argument that we're heading in the right direction. Or maybe there's not. And you can make the argument that that's a weak argument. Okay, a good question is how is the government going into debt? How is this happening? It's simply because they spend more money than they have coming in. Essentially, they're operating at a deficit. And they have to borrow the difference and they go further into debt. The timing of their deficits, it's not smooth. So you can take a look for yourself. This graph, it shows you whether the government is at deficit or surplus by each month of the year. This is for 2025. You'll notice that in certain months, take April as an example, the government has more money coming in than going out. And in that case, in that month, they have a surplus. But that's because April is a tax filing deadline. And along with that comes the deadline to make the tax payments. So that makes sense, right? Now a good question is why is there surplus in these months? It's because estimated tax payments are due in those months. So these are the tax payments that sole proprietors or independent contractors, business owners, etc. Those tax payments that they make installments and they're deposited in those months. But as you can see for the rest of the months, it's just consistent overspending by the government. Moving on, I want to show you this from the Treasury's website. This is for the full fiscal year 2025. And it gives you the breakdown. For the full year 2025, the U.S. government overspent by $1.78 trillion. Now the government collected $5.23 trillion in taxes. And you could think of that as their revenue. But if you're taking a look, I mean take a look at that. I don't know why they don't just write $5.23 trillion. I guess they think that writing $5,235 billion makes it look better than $5.23 trillion. But a thousand billions is a trillion. Anyways, $5.23 trillion collected. Half of that money is coming from personal income taxes, $2.65 trillion. And then the next largest source is coming from FICA taxes, Social Security taxes, and Medicare taxes. Now if you're an employee, then this comes out of your paycheck, every single paycheck. If you're self-employed, then you pay that tax. It's called the self-employment tax. And then look at how much smaller the other collections are. Corporate income taxes amounted to only $452 billion of the $5.2 trillion collected. Customs, duties, tariffs, they brought in a total of $195 billion. Now I want you to take a look at this, just the basic math. It's very straightforward. The government collected $5.2 trillion, but they spent $7 trillion. And that's how we end up with a $1.78 trillion deficit. And that's how much money they have to borrow to continue their overspending habits. Now let's take a look at their spending. Where is the money going? The biggest expenses are Social Security benefits and health care. So we're talking about Medicare and Medicaid, etc. Now look at this. The government spent $970 billion on interest payments in 2025. You have to remember that the government is in debt for $38 trillion. They don't get that money for free. They don't get to borrow that money for free. They have to pay interest on it. The U.S. government spent more money on interest payments than they did on military spending. $970 billion for interest payments. They spent $917 billion on national defense. So that's pretty wild, huh? So this is where our tax dollars are going. And that is a lot of money, especially percentage-wise. That's 18.5% of everything that the government collects is going towards interest. Okay, so let me ask you this. The government is overspending by about $1.8 trillion, right? Where are they supposed to cut in order to balance the budget? In other words, who are they going to stop giving money to? Or who are they going to cut benefits to? And who are they going to piss off? Just think about it. Even if they told all Social Security recipients, like, hey, we're sorry, but we're going to pay you $0. We're going to give you no benefits moving on forward. Like, you're cut off. Even if they did that, that wouldn't even balance the budgets. They overspend by $1.8 trillion. Social Security benefits are $1.5 trillion. And of course, logically speaking, they can't do that because 72 million Americans receive Social Security benefits. And those 72 million Americans would turn into very angry voters. So even if you reduce their payments by a fraction, I mean, the politicians are going to lose their votes. So it's going to be the same concept with Medicare and Medicaid. Now, let's take a look at the next category, interest payments. Well, I just want to say that they can't just stop making interest payments to their creditors. Otherwise, what's going to happen? They're going to default. And then the dollar is going to crash. And then the U.S. dollar would lose reserve currency status and reserve asset status. I mean, that's already happening, but it would accelerate that process from years to days. And of course, there's going to be, there would be major consequences if that happens. But this is why the Federal Reserve is cutting interest rates, so that this expense, these interest payments get lowered. However, as the Federal Reserve lowers the interest rates so that the government can borrow money for cheaper, I mean, that lower interest rate is only going to apply to the newly issued debts. So why don't you take a look at this? The government spent $970 billion on interest payments in 2025, right? Now, I just want to bring this to your attention. Even if the Federal Reserve cuts interest rates close to 0%, like it was in previous years, the government would still be paying hundreds of billions of dollars in interest payments. So it's not like this category is going to drop down to $0. But another thing that you have to think about is if they try to do that, lower the Fed funds interest rate down to 0%, then you know what's going to happen. With 0% interest rates, it's going to massively spike inflation. Right now, the Fed funds interest rate is at 4%. And you have to keep in mind that the government's debt continues to grow. It's growing at a very rapid speed, too. And the bigger the debt becomes, the more money that they're going to have to pay interest on. So I'm telling you, it is a very bad situation, to put it lightly. But for next year, so we're talking about fiscal year 2026, how much can we realistically cut down this interest expense by if the Federal Reserve continues to lower interest rates? $100 billion, $200 billion. If they were to do that, I guess that's progress. But you saw the numbers for yourself. It's not going to be a game changer if you're trying to cut $1.8 trillion. Okay, besides those expenses, take a look for yourself. What is there left to cut? The biggest one that's remaining is going to be income security for $702 billion. But if you're going to go after that one, you have to remember, you're talking about 42 million Americans that are on SNAP benefits. It also includes low-income housing, housing assistance, programs for Americans with disabilities, infants, etc. So is the federal government supposed to, and will they choose to, leave them out to dry? And then you have the VA benefits. Are you going to reduce their money and their benefits? Okay, besides those categories, take a look for yourself. Everything else is so small. It's not going to be enough to move the needle. So again, I ask the question, where is the funding going to be cut? And who's going to get screwed over in that process? And that's the government's dilemma. And the politicians simply don't want to upset and lose voters. So what do they do? They continue to overspend. And they would just rather print more money, which, of course, causes more inflation. And that hurts the middle class and lower-income earners the most. And I just want to tell you, trust me when I say this, it doesn't matter who is in office. It could be a Republican, it could be a Democrat. It doesn't matter what political party. Both parties are going to overspend. The national debt is just going to grow. And there is no stopping this train. I want you to take a good look at how the government debt has been growing under each of the presidents. So President Bush, he added a record amount of new debt. Obama outdid Bush. Trump outdid Obama. Biden outdid Trump. And let's see if Trump adds more debt than Biden. Okay, so that is the current fiscal situation. And I bet you're not surprised. Nothing new here, right? The debt crisis continues. And the situation is getting worse. Anyways, I'll keep you updated. Please subscribe. Thank you for the support. And I wish you a very nice day. Take care.