Additional Coverage:
- Economist warns the ‘American dream’ could be over due to $38.5 trillion national debt (marketrealist.com)
Is the American Dream Drowning in $38.5 Trillion of Debt? Experts Sound the Alarm
While many Americans are grappling with the rising costs of everyday essentials – from groceries to housing and healthcare – a far larger, less discussed threat looms: the nation’s staggering $38.5 trillion national debt. Entering 2026, the United States faces historically high fiscal liabilities, a situation experts warn is suffocating the very essence of the “American Dream.”
According to Kurt Couchman, a senior fellow in fiscal policy at Americans for Prosperity, this escalating debt crisis could push the country into a full-blown depression if left unchecked. His concerns echo those of BlackRock CEO Larry Fink, who separately warned that the mounting national debt could soon destabilize financial markets.
The concept of the “American Dream” already appears to be slipping away for many, exacerbated by a “K-shaped” economy. This economic phenomenon has led to widening wealth inequality, stagnant wages for many, and a decline in social services.
As a result, the middle class faces flat incomes and soaring expenses, making upward mobility increasingly difficult. Reports suggest that for many, achieving the American Dream now feels contingent on having a hefty $5 million in the bank, given the spiraling costs of retirement, raising children, and even car ownership.
While inflation, deindustrialization, and wage stagnation are often cited as culprits, Couchman argues that these symptoms ultimately trace back to the immense sum the U.S. owes its debtors. The problem isn’t just the sheer volume of debt, but the rapidly increasing interest payments.
In the first quarter of fiscal year 2026 (October-December 2025), interest outlays surged by 15% to $355 billion, with the average interest rate hitting 3.32% – the highest since 2009. This trend has prompted warnings from financial giants like Ray Dalio, founder of Bridgewater Associates, who predicts that interest payments could eventually consume all government investments vital for economic prosperity.
In recent Congressional testimony before the House Judiciary Subcommittee on the Constitution and Limited Government, Couchman cautioned that “the growing debt risks a bond market reckoning with potentially dire consequences for the American people.” He emphasized that the actions of congressional representatives would determine whether the cornerstones of the American Dream – peace, freedom, and prosperity – endure, or if the nation faces a future of decline. Couchman, who previously held government affairs positions at the Committee for a Responsible Federal Budget, further attributed the current affordability crisis largely to an “explosion” in monetary supply at the onset of the pandemic.
“We’ve already experienced the inflationary aspects of excessive federal spending and debt,” Couchman explained. “We’re now at the point where if you look at [the Congressional Budget Office], World Bank, and [International Monetary Fund] and others, they say that once the debt burden surpasses a certain threshold of GDP, it starts to slow the economic growth.” He clarified that the concern isn’t solely the amount of debt, but the debt-to-GDP ratio, warning that an imbalance could significantly hinder economic growth due to excessive interest payments.
BlackRock CEO Larry Fink echoed these sentiments in an interview, highlighting that while markets obsess over the Federal Reserve, fiscal discipline, particularly concerning the national debt, is largely ignored. Fink suggested that the unsettling trajectory of the national debt is unlikely to change, potentially impacting the U.S.
Treasury market – a global benchmark – as international investors begin to question America’s fiscal path. However, Fink offered a glimmer of hope, suggesting that if the country maintains a consistent 3% GDP growth rate over the next 10 to 15 years, the debt-to-GDP ratio could shrink, even with seemingly large deficits.