We Owe More Than We Make. That's a Problem.

📆This Week’s Topic

$40 trillion. are we serious? Will this debt ever stop growing? The short answer is we don’t know. The US government currently owes over $40 trillion in unpaid debt to various creditors. A decade ago, this number sat below $20 trillion and we’ve since doubled it.

💳 The Issue

The issue is that government efforts to generate revenue has largely failed for the federal government. For example, President Trump’s act of imposing sweeping tariffs made a little less than $200 billion, but nearly all the money had to get refunded after the U.S. Court of International Trade ruled that the tariffs were illegal. Another example, is the Department of Government Efficiency (DOGE) which was at first led by Elon Musk where Musk promised to decrease government spending by at least $1 trillion. In reality, they have only saved $200 billion which is way below their quota. In addition, many tax cuts from the Trump Administration have made the debt situation worse as well. This chart illustrates how fast its growing compared to GDP. The fact that in 2026, the debt is over 123% of GDP is frightening.

📊 How Does This Affect My Wallet?

This is going to hit your wallet directly because if these revenue and debt reduction methods continue failing the federal government will have no choice but to generally raise taxes like sales tax or income tax. This would be devastating for a lot of people because it’s already hard to live based on the economy and current taxation and pushing more households into financial stress could slow down economic growth. Even new tax revenue may not go towards the debt since government spending has been adversed to debt reduction since the government is using their money to fund other programs. One way you can help is paying your taxes and getting in contact with your local politican in congress to try and get the money managed better.

🔚 Outcome

The outcome of this debt situation is that either the government is going to have to cut expenses or probably increase overall taxes since traditional revenue making methods have been failing. Or the government continues what it has been doing for the past decade, kicking the can beside the road. If we keep up with this debt rate we could face austerity, dramatic across the board cuts to try and take a dig at the national debt. This would be deeply unpopular as many people rely on these government programs which would most likely have significant cuts and it could cause cuts to programs like medicaid and social security which some people need to survive.

⏳ Final Summary

In summary, The US national debt has doubled in a decade and surpassed over $40 billion. It has seen no sign of slowing down and at 123% of GDP it is increasing at such a rapid rate. Efforts in the past couple of years to slow down the debt or try to reduce have failed. Even efforts to simply increase revenue hasn’t worked such as the majority of the tariff revenue was refunded because the tariffs turned out to be illegal.

🙏Thank You & Important Information

Thank you for reading this edition of Friday Finance. As we just got back after our vacations feel free to reply with anything: ideas, feedback, or anything else you would want me to know. We also started a supporter page for our best fans you can support us with the button at the bottom. We would greatly appreciate any donation you are willing to give. Hope you all had a great summer and I will see you next time.

Best,

Jacob Gans

Friday Finance