Last Updated: 17 March 2026
One topic that has dominated the discussion on the global economy in the past decade or so has been the rising national debt of the US. However, geopolitical issues, oil politics, and the rivalry with the major economies of the world, including China, India, and Russia, are also becoming more and more relevant.
Some of the most asked questions in this regard include:
Why does the US have such a high debt?
Why does oil remain the dominant factor in US power?
What does the US's economy look like in comparison to the economies of the rest of the world?
And why are politicians, including Donald Trump, so vocal about these issues?
To understand the larger picture, we need to consider some of the following factors: the structure of the US economy, the spending habits of the US government, oil politics, and the power rivalry with the rest of the world.
America’s Total Debt: A Historic Level
The United States national debt has hit a record high. In early March of the year 2026, the total United States national debt is estimated to be approximately $38.8 trillion.
This total debt can be divided into two categories:
The debt held by the public, meaning the government owes money to investors, foreign governments, and institutions.
Intragovernmental debt, meaning the government owes money to itself, such as to the Social Security trust funds.
In just one year, the United States national debt has grown by over $2.6 trillion. This translates into billions of dollars added each and every day.
In perspective, the United States owes more money than most countries' total economic production each year.
However, the question still lingers, what makes the United States national debt so high?
Why America Is So Deep in Debt
The buildup of the U.S. debt did not begin recently but is the culmination of long-term trends.
1. Government Spending Outruns Government Revenue
The U.S. federal government spends much more money than it collects in taxes. The U.S. government spends about $7 trillion annually, whereas its revenue is only about $5 trillion.
When the government spends more than it earns in taxes, the only way the government can pay its debts is by issuing treasury bonds.
2. Crisis Spending and Stimulus
There have been a series of crises in the past two decades that significantly increased borrowing in America:
The 2008 financial crisis
The COVID-19 pandemic
Economic stimulus packages
Military spending
The trillions spent on the COVID-19 pandemic alone were through borrowing.
3. Interest on Existing Debt
Another major factor is interest payments.
The reason the government has for borrowing money is because it has to pay interest on the money it has borrowed in the form of bonds. The interest on these bonds is expected to rise to almost $1 trillion in the years to come.
This means that the U.S. has to borrow even more money to pay interest on the money it has borrowed.
Why Oil Is Still So Important to America
Despite the growth in the production of green energy, oil remains a key pillar of global power, and America is aware of this more than any other nation in the world.
Oil and the Global Economy
Oil is not merely used as a source of energy for cars and airplanes. It is used as:
- a source of energy for transportation
- a source of energy for global trade
- a source of energy for manufacturing
- a source of energy for agriculture
- a source of energy for the military
The Dollar and the Oil System
For many years, the international trade in oil has been in dollars. This system is called the petrodollar system.
When countries purchase oil, they buy it in dollars. This leads to:
A greater demand for the dollar worldwide.
Foreign governments hold U.S. assets
The United States can borrow money at low interest
In essence, the international trade in oil supports the strength of the American financial system.
America as a Major Energy Producer
The United States of America is today one of the world’s largest oil and gas producers. This provides it with great geopolitical clout.
If oil prices go up, American oil and gas producers may be beneficiaries, although oil price increases also mean increased costs for consumers.
The recent geopolitical tensions in the Middle East have also shown how vulnerable oil markets are to disruptions.
Comparing GDP - America vs. China, India, and Russia
In order to understand America’s debt, we need to compare it with the size of its economy.
What is GDP?
 |
| the value shown are approx., just to give an idea |
GDP - Gross Domestic Product - is a total value of all goods and services produced in a given year.
Estimated GDP - 2026
United States - about $31.8 trillion
China - about $20.6 trillion
Russia - about $2.5 trillion
India - about $4.5 trillion
These numbers show that the United States still has the largest economy in the world, although China has been steadily closing the gap.
India, meanwhile, is one of the fastest-growing major economies and is expected to continue expanding strongly in the coming years.
Russia’s economy is smaller than those of the United States and China but remains significant due to its natural resources and geopolitical influence.
Debt vs Economic Size
Another economic measure that is commonly used is the debt-to-GDP ratio.
This is a measure of the amount that the country owes in comparison with the size of the economy.
In the case of the United States, the national debt is now at the level of 100% of the GDP, which means that the country now owes as much as it is producing in a year.
While this is a worrying situation, some economists have argued that developed countries can afford this debt because they are viewed as sound economies by investors.
This is not, however, a long-term solution, as the country may end up with serious economic problems if it continues with this trend of borrowing money.
Political Tensions and Economic Debate
Today, economic issues are strongly linked to political issues in the United States.
Different leaders from various political parties offer varying solutions to the debt issue.
Some of the measures proposed by some include:
Reducing government expenditure
Cutting down on social programs
Reducing taxes to boost economic growth
While some propose:
Increasing taxes on the wealthy
Increasing investment in infrastructure
Long-term economic reforms
Why Donald Trump Is So Vocal About Economic Issues
One of the most prominent voices in this debate has been Donald Trump.
Trump has been quick to point out problems with trade deficits, global supply chains, and economic rivalries with other countries, like China.
The economic policies that Trump has been promoting include:
economic nationalism
reducing reliance on foreign manufacturing
protection of American industries.
There has been controversy surrounding some of Trump’s economic policies, particularly with regards to tariffs and taxation, as they may impact America’s long-term deficits and debt.
The Larger Geopolitical Competition
The discussion regarding the debt of America cannot be separated from the larger global competition.
China’s Rise
China has invested heavily in the development of its infrastructure, technology, and industry.
China has also expanded its global economic reach through initiatives such as the Belt and Road Initiative, extending to Asia, Africa, and Europe.
India’s Economic Growth
India is emerging as one of the fastest-growing large economies due to:
A young population
Growing digital industries
Increasing global investment.
It is believed that India could be the third largest economy in the world in the next decade.
Russia’s Strategic Position
The Russian economy is relatively small, and their influence is largely based on their energy exports and resources.
Energy exports, such as oil and gas, are an important part of Russia’s influence.
Where the Situation Could Lead in the Future
The future of the global economy will largely depend on a number of key factors.
Debt Sustainability
If the debt level in America continues to grow at this rate, policymakers might be faced with a situation that requires them to:
* Raise taxes
* Reduce spending
* Increase borrowing
Each option has economic and political implications.
Energy and Resource Competition
The issue of energy security is bound to remain at the heart of global politics.
While renewable energy sources are becoming increasingly prominent, oil and gas are set to remain essential energy sources in the future.
Any country that has control over energy supply or transport will remain at a strategic advantage.
Economic Power Shifts
Although America is still the world’s largest economy, the rise of China and India is gradually changing the global economic landscape.
The future economic leadership will be determined by a number of factors, including technological innovation, population, and energy availability.
Final Thoughts
The story of America’s debt is not simply a story of numbers. It is, in fact, a story of deeper forces at work in the world, forces such as government spending, economic competition, energy politics, and international trade.
Despite the United States’ enormous wealth, the rate at which national debt is being accumulated has created important concerns regarding sustainability.
Additionally, countries such as China and India are becoming major players in the world economy, and energy politics continue to play an important role in international relations.
The way in which these forces continue to play themselves out in the world will be an important factor in the balance of world power in the years ahead.
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