Millions of jobs could disappear over coming decades if the US national debt keeps rising instead of being brought under control, the Peterson Foundation said.
Higher debt diverts more federal resources to interest payments, leaving less room for investments that support economic growth and long-term productivity.
Private investment could also weaken as government borrowing grows, limiting business expansion and reducing hiring and wage gains over time.
Young workers face the sharpest risk because weaker job markets and slower early-career pay growth can undermine savings, homebuying, student-loan repayment and retirement preparation.
Could a productivity boom from AI be the unexpected solution to the nation's spiraling debt crisis?
As national debt interest payments exceed $1 trillion, how much could it ultimately shrink your personal income?
With U.S. debt nearing its 'unmanageable' limit, what happens the day after a fiscal crisis hits?
Stagflation and Surging Debt: How America’s $39 Trillion Burden Threatens Jobs, Wages, and Future Prosperity (2025-2026)
Overview
In late 2025 and mid-2026, the U.S. economy faces a challenging mix of rising national debt, a shifting job market, and ongoing inflation. The federal debt has reached the size of the entire economy for the first time since World War II, driven by persistent budget deficits where government spending exceeds revenue. To cover these gaps, the government borrows by selling bonds, causing the national debt to grow rapidly—over $7 billion each day. These pressures have sparked concerns about stagflation, as Americans feel squeezed by higher costs and uncertain job prospects, highlighting the urgent need for fiscal stability.