内容摘要：The government may raise taxes to generate more revenue to pay down its national debt, increasing costs for average people. Increasing debt could also lead to higher interest rates, making mortgages, car loans and credit card debt more expensive.

The government may raise taxes to generate more revenue to pay down its national debt, increasing costs for average people. Increasing debt could also lead to higher interest rates, making mortgages, car loans and credit card debt more expensive.

The US has the highest national debt in the world, a quarter of which is owned by other countries.On Sunday, a key congressional committee in the United States approved President Donald Trump’s new tax cut bill, which could pass in the House of Representatives later this week.

The bill extends Trump’s 2017 tax cuts and may add up to $5 trillion to the national debt, deepening worries after a recent US credit ratings downgrade by Moody’s on Friday, which cited concerns about the nation’s growing $36 trillion debt.The US has the highest amount of national debt in the world and is facing growing concerns about its long-term fiscal stability.Debt is simply the total amount of money the US government owes to its lenders, currently amounting to $36.2 trillion. This represents 122 percent of the country’s annual economic output or gross domestic product (GDP), and it is growing by about $1 trillion every three months.

The highest debt-to-GDP ratio was during the pandemic in 2020, when the ratio hit 133 percent. The US is among the top 10 countries in the world with the highest debt-to-GDP ratio.What is the debt ceiling, and why does it keep increasing?

When the government spends more money than it collects, it creates a deficit.

To cover this deficit, the government borrows more money. To ensure that borrowing is subject to legislative approval, the US Congress sets a limit to how much the government can borrow to fund existing obligations like Social Security, healthcare and defence. This limit is known as the debt ceiling.Trump has argued that the tariffs are a vital negotiating tool to encourage greater investment in the US economy.

But economists have warned that attempting a “hard reset” of the global economy – through dramatic tax hikes like tariffs – will likely blow back on US consumers, raising prices.Rachel Ziemba, a senior fellow at the Center for a New American Security, said the latest tariff hike on steel also signals that negotiating trade deals with Trump may result in “limited benefits”, given the sudden shifts in his policies.

Further, Friday’s announcement signals that Trump is likely to continue doubling down on tariffs, she said.“The challenge is that hiking the steel tariffs may be good for steel workers, but it is bad for manufacturing and the energy sector, among others. So overall, it is not great for the US economy and adds uncertainty to the macro outlook,” Ziemba explained.