US National Debt Breaks $39 Trillion for the First Time, Debt Crisis Looms Again

Since the outbreak of the war between the U.S. and Iran, the growth rate of U.S. debt has been accelerating, and so far, the total U.S. national debt has officially surpassed $39 trillion.

How significant are the impacts of the U.S.-Iran conflict on America’s debt and fiscal health? Is a debt crisis looming again? How will global capital respond to this risk?

U.S. Debt Breaks $39 Trillion

According to the latest data released by the U.S. Treasury Department, as of March 18, the U.S. national debt has officially exceeded $39 trillion.

It took only 146 days for the debt to grow from $38 trillion to $39 trillion.

Since 2020, this debt has skyrocketed like a runaway horse, increasing nearly $7 trillion in one go. At this rate, reaching $40 trillion by 2026 seems almost certain.

Currently, the U.S. needs to borrow $3.90 to generate $1 of economic growth. This “debt-driven survival” model has long deviated from normal economic development, with the debt bubble swelling dangerously and potentially bursting at any time.

Moody’s warned last year that the global financial markets could see the U.S. sovereign credit rating downgraded from Aaa to Aa1 due to ongoing fiscal deterioration and an addiction to borrowing that has become uncontrollable.

Many now predict that as the U.S.-Iran war continues, the U.S. Treasury’s borrowing pace will accelerate further.

Since March, the U.S. has increased its involvement in the Iran battlefield. According to White House disclosures, as of March 15, the U.S. has spent $12 billion.

And this $12 billion is just the tip of the iceberg—pre-war deployments, ammunition replenishment, equipment maintenance, and soldiers’ subsequent benefits are all indirect costs not yet included.

Wharton School estimates that if the war lasts another two months, the total cost could be at least $40 billion, possibly up to $95 billion, adding even more strain to the already tight U.S. fiscal situation.

The uncertainty of war, combined with the continuous expansion of U.S. debt, has directly shattered market bullish sentiment.

According to the Financial Times, investors are rapidly shifting to cash holdings, triggering a “big retreat” in global funds.

This is the direct reason behind the recent strengthening of the U.S. dollar index.

Due to liquidity shortages and increasing demand for dollar cash, the international currency market is experiencing a dollar shortage.

Data from China Economic Net shows that in December 2025, global investors collectively reduced their U.S. debt holdings by $88.4 billion. The top three debt holders—Japan, the UK, and China—also reduced their holdings: Japan by $17.2 billion, the UK by $23 billion, and China by $400 million. Major European economies followed suit.

This collective reduction isn’t panic but a rational assessment of U.S. fiscal health—no one wants to hold a mountain of debt that could depreciate at any moment.

More critically, U.S. interest payments on debt have become astronomical.

In fiscal year 2025, interest expenses on U.S. debt will reach $1.4 trillion, surpassing Social Security and defense spending for the first time, accounting for 5.3% of U.S. GDP. Borrowing requires paying interest, and the U.S. is nearing the point where it can barely sustain these costs, relying on continued money printing and borrowing, creating a vicious cycle.

The reason the U.S. dares to borrow recklessly is fundamentally due to reliance on dollar hegemony, believing that printing money can solve everything.

But debt cannot continue indefinitely. When Greece’s debt spiraled out of control, its economy shrank by a quarter over five years, national income and pensions dropped by 25%, unemployment soared to 25%, and youth unemployment approached 60%. Ordinary people’s lives became extremely difficult.

Some may think the U.S. debt crisis is far away, but in reality, global capital flows are interconnected—shaking the currency, stock markets, and potentially causing the dollar to quietly depreciate.

The U.S. debt crisis is never just a debt issue but a backlash against American hegemonic logic.

For years, the U.S. has maintained prosperity through borrowing, shifted conflicts through war, and treated U.S. debt as “global hard currency,” making the world pay for its extravagance.

Now, countries are accelerating diversification of foreign exchange reserves. The proportion of official gold reserves worldwide has hit a new high since 2000, and the trend of de-dollarization is becoming more evident. The “pillar” status of U.S. debt is gradually eroded.

As U.S. debt continues to grow, future global conflicts will increase, and geopolitical tensions will intensify. The U.S. swings between recession and hyperinflation—either refusing to raise the debt ceiling and risking crisis, or continuing to borrow and letting inflation spiral out of control. This dilemma will inevitably impact the global economic landscape.

Looking back at the $39 trillion figure, it is not just a cold number but a signal of the reshuffling of the global economic order.

Author’s note: Personal opinion, for reference only.