As Democrats and Republicans trade political blows in the recent government shutdown, most economists warn that the real crisis—the runaway national debt and unsustainable fiscal course—is still frighteningly unmentioned.
President Donald Trump’s Republican Party and Democratic legislators have manufactured the 15th partial federal government shutdown since 1981, but few of those earlier episodes have laid bare the country’s long-term budget vulnerability so starkly.
Political Deadlock Overshadows Fiscal Reality
At the heart of the dispute lies a Democratic demand for increased domestic spending, a proposal that would add roughly $1.5 trillion in expenditures over the next decade, according to the nonpartisan Committee for a Responsible Federal Budget (CRFB). This would further swell the national debt, which already stands at nearly $38 trillion—a historic high that continues to climb.
“We have huge, real problems in this country, and we’re stuck in a perpetual messaging war instead of serious efforts to fix them,” said Maya MacGuineas, president of the CRFB. “Without a bipartisan commitment to fiscal responsibility, we’re heading toward a financial reckoning.”
The Senate has previously voted on competing funding packages. The Republican-controlled House passed a bill—backed by Trump—to reactivate the agencies at levels of current spending up until Nov. 21. Democrats proposed a bill that would boost healthcare and social service expenditures. Neither group has even made a serious attempt to address the $2 trillion-a-year federal deficit, though, that is expanding.
From Fiscal Battles to Culture Wars
In the past, most U.S. government shutdowns were a matter of budget restraint, spending caps, or deficit reduction. But since Trump’s first term in office in 2017, shutdowns have increasingly been driven by social or political issues—immigration to healthcare—rather than fiscal reform.
Attention now is centered on approximately $1.7 trillion in agency appropriations, one-quarter of total federal outlays. Meanwhile, independent analysts recommend that debt is growing faster than economic expansion, with interest payments now crowding out vital social and defense initiatives.
This course threatens to deplete Social Security and Medicare trust funds, projected to face shortfalls over the next decade—potentially leading to benefit cuts for tens of millions of retirees.
Multiplying Debt, Mounting Interest
The financial situation of America has drastically changed in the last 25 years. The national debt has jumped from $5.67 trillion in 1999 to $37.88 trillion currently, a more than six-fold increase that has continued irrespective of which party is in power in Washington.
Interest on the debt now costs more than $1 trillion annually, exceeding defense spending for the first time in history. According to the Congressional Budget Office (CBO), if left unrestrained, interest payments could double in the early 2030s and represent a third of all federal revenue.
Republicans, who are under the direction of House Speaker Mike Johnson, have themselves voiced concern about out-of-control spending. But critics say their criticism often targets “radical” Democratic policies rather than offering serious proposals for debt reduction. Democrats also blame the 2017 Trump-era tax cuts, which the CBO estimates will add $4.1 trillion to the deficit over ten years.
Trump’s strategists reply that economic growth and tariffs would generate up to $4 trillion in added tax revenues that would offset the blow to the budget. Experts are not so sure, however.
“Donald Trump would spend whatever it takes to advance his political and personal agendas,” said Senate Finance Committee’s top Democrat, Senator Ron Wyden.
Few Fiscal Hawks Remain in Washington
While finger-pointing across the aisle is an ongoing thing, a few deficit hawks have tried to keep fiscal conservatism on the table. Kentucky Senator Rand Paul is one who has continued to vote against Republican and Democratic spending bills for their labeling them “budgetary disasters in disguise.”
“This whole shutdown is political theater,” said Senator Ron Johnson of Wisconsin. “The real issue is the $37 trillion debt. But instead of tackling that, we’re distracted by short-term politics.”
Johnson and others have proposed legislation to prevent future shutdowns and restore spending to pre-pandemic levels. Kansas Senator Roger Marshall further proposed that long-term balance would require reducing total federal spending over time to approximately $6.4 trillion—a lofty goal in an era of rising entitlement and defense costs.
Sleepwalking Into a Debt Crisis
The majority of economists warn that America is moving towards a budgetary breaking point. The U.S. debt-to-GDP level has already surpassed 120%, which is similar to post-World War II highs. Without profound policy transformation, the International Monetary Fund (IMF) foresees the ratio reaching 140% by 2035, a benchmark typically encountered in financial crises in emerging market economies.
“We are sleepwalking into a debt crisis,” cautioned Manhattan Institute senior fellow Jessica Riedl. “The pain may not be nigh, but with each year of political procrastination, it’s harder to avoid the reckoning down the road.”
What Comes Next
Both parties have difficult choices ahead. Cutting spending risks driving off voters who depend on federal programs, and raising taxes remains politically toxic. Economists suggest that a mix of directed entitlement reform, phased tax reform, and investment to drive growth could restore stability to the agenda—if politicians are courageous enough to do so.
In the meantime, Washington’s attention is locked onto the politics of the shutdown, not the underlying crisis—the structural imbalance of America’s finances—before it.
The U.S. is not broke,” MacGuineas said, “but it’s on an unsustainable trajectory. The sooner we delay to deal with it, the fewer options will be available.”.
