**US Debt Reaches $37 Trillion: Are Concerns Justified?**

As the nation's debt hits a staggering $37 trillion, experts warn of the sustainability of US borrowing and the possible consequences of inaction.

The recent approval of Donald Trump's Big Beautiful Budget Bill has reignited concerns over the United States' escalating national debt, which now stands at a staggering $37 trillion. The new budget, criticized by figures such as Elon Musk as a "disgusting abomination," is projected to add a further $3 trillion to the already daunting financial burden.

Doubts have emerged surrounding the willingness of international investors to continue financing the US, particularly as the dollar's value weakens, falling by 10% against the pound and 15% against the euro this year alone. Borrowing costs have remained relatively stable; however, an increasing gap between long-term and short-term borrowing rates indicates a growing skepticism regarding the sustainability of US debt.

Ray Dalio, founder of the world's largest hedge fund, argues that the US is reaching a critical juncture, with impending annual payments on debts and interest possibly soaring to $10 trillion. He stresses the urgency of addressing the national debt before it becomes unmanageable.

In light of these concerns, potential scenarios could include significant cuts to government expenditure, considerable tax increases, or both. Dalio suggests that reducing the budget deficit from its current 6% to 3% may alleviate future challenges. However, the trajectory set by the new budget leans toward further tax cuts, complicating efforts to rectify the fiscal imbalance.

Another possibility is the US Federal Reserve's revival of monetary policy approaches used in 2008: printing more money and purchasing government debt. This strategy, while providing short-term relief, could exacerbate inflation and deepen wealth inequality.

A more drastic scenario arises if the US defaults on its debts, a situation that could send shockwaves through the global financial system, given the integral role of US Treasury securities. Although this outcome appears unlikely at present, experts highlight that the world's reliance on the dollar offers little alternative.

Economist Mohamed El-Erian emphasizes that while attempts to diminish dollar holdings are underway, alternatives remain limited, reinforcing the dollar's prevailing dominance. Meanwhile, the Governor of the Bank of England acknowledges the ongoing concerns over US debt and the dollar's status, indicating heightened attention to these challenges.

Despite the alarming figure of $37 trillion—comparable to saving a million dollars every day for 100,000 years—the appropriate lens for understanding debt lies in its proportion to national income. Currently, the US economy generates around $25 trillion annually, placing its debt-to-income ratio below that of nations like Japan and Italy.

As the world remains captivated by the long-standing debate surrounding the dollar's future, analyses like William F. Rickenbacker's "Death of the Dollar," penned in 1968, underscore the ongoing vigilance required. While the dollar's status as the global reserve currency faces pressures, its resilience continues to shape discussions on the viability of US debt moving forward.