Global Debt Soars to $91 Trillion, U.S. Alone Holds $35 Trillion, Sparking Concerns Over Economic Stability

Global debt has reached a staggering $91 trillion, with the United States alone responsible for over a third of this amount. The U.S. debt has soared to $35 trillion, a figure that has raised alarms at the International Monetary Fund (IMF) due to its potential risks to the global economy.

To put this colossal number into perspective, if $35 trillion worth of dollar bills were laid end to end, they would reach far beyond our planet. Even the moon, which is about 2.5 billion dollar bills away, pales in comparison to this astronomical sum. The sheer magnitude of U.S. debt is difficult to fathom, emphasizing the gravity of the situation.

“Yeah, these are big numbers,” remarked Peter Blair Henry, an economist at Stanford University’s Hoover Institution. Henry joined in visualizing just how far $35 trillion in dollar bills could stretch. This massive trail of debt would easily pass Mars, which is approximately 140 million miles away, requiring roughly 1.5 trillion dollar bills. Even Jupiter, the largest planet in our solar system, would not be far enough. It would take around 4.5 trillion bills to reach Jupiter, but the U.S. debt continues beyond this point. Next in line is Saturn, but with an average distance requiring only 9 trillion dollar bills, even Saturn can’t encapsulate the U.S. debt.

The journey continues past Uranus and finally reaches Neptune, nearly 30 trillion dollar bills away. By the time we reach the last official planet in our solar system, we still have about $6 trillion of U.S. debt left. A dollar bill measures just over 6 inches, and 35 trillion of them would nearly reach Pluto. The realization of this vast amount of debt is truly shocking, making the IMF’s concerns all the more understandable.

“Honestly, the best way to deal with huge numbers like that is to think about ratios,” said Blair Henry. “What really matters is: How big is the debt relative to the size of the economy?” In simpler terms, America’s near-Pluto debt might not be problematic if the U.S. economy was producing an equivalent amount of wealth. However, this isn’t the case. The U.S. economy is generating roughly $30 trillion in gross domestic product (GDP) this year, while the debt has climbed to $35 trillion. The current debt-to-GDP ratio stands at about 120%, meaning the nation owes more than it produces—a situation that worries Henry.

“As your debt ratio rises, your finances are just getting tighter and tighter,” he explained. “And the danger is, at some point, your creditors look at your debt situation and say, ‘Oh my gosh, you are not going to be able to pay me.’” This shift in perception among creditors could lead to higher interest rates on borrowed money, driving up borrowing costs significantly.

“Your borrowing costs go up dramatically, and that can lead to a financial crisis,” Henry added.

This concern isn’t just theoretical—it’s already happening. For a long time, the U.S. enjoyed low borrowing costs, with creditors confident in the country’s ability to repay its debts. The size of the debt seemed irrelevant. However, as the debt has ballooned, lenders have begun demanding higher interest rates from the U.S. “We’ve hit a turning point,” said Harvard economist Kenneth Rogoff. “At least I believe that.”

Rogoff, who served as chief economist at the IMF for years, sees the rising interest on U.S. debt as a significant economic problem. “This is the biggest thing that’s happened in the global economy in the last five or 10 years,” he said. The U.S. debt has reached a level where even a small increase in interest rates can have massive consequences.

“The interest payments that we have to make on U.S. debt have soared,” Rogoff noted. “I think the interest payments alone are the equivalent of our military budget.” This year, interest payments on the debt are expected to approach $1 trillion—a substantial amount that could otherwise be spent on infrastructure, healthcare, or economic growth. The size of the debt is not only immense but is also siphoning resources from other critical areas.

“People got this idea that it was just free—‘Don’t worry about what your debt is!’” Rogoff commented. “That’s the big change that’s happened in the world, is a bucket of cold water on this idea that debt doesn’t matter.” He cautioned that if another global crisis, akin to COVID-19, were to occur, the U.S. might need to spend large amounts of money quickly, making borrowing even more expensive. This scenario could become risky, potentially destabilizing the economy, especially since other major economies are also heavily indebted.

Rogoff emphasized that while debt can be a valuable tool, it should not be used without restraint. “You want to use debt for a rainy day, but you don’t want to just declare every day a rainy day,” he said.

Interestingly, Neptune is known for its diamond rain, but until such a resource becomes accessible, the solution to managing the debt seems straightforward to Rogoff. It would require Congress to make difficult choices, including cutting spending and raising taxes. The country would need to adopt more stringent fiscal policies, and compromise would be essential in Congress.

However, given the political climate, this might be more challenging than reaching for Neptune’s diamonds.