The federal government is on track to spend about $7.4 trillion in 2026 while collecting about $5.6 trillion, according to the Congressional Budget Office.

The difference—roughly $1.9 trillion—has to be borrowed.

That is the federal deficit. Run deficits year after year, and they accumulate into the national debt.

So why does Washington keep borrowing so much?

The answer is uncomfortable: America has made promises that cost more than the federal government collects—and neither elected officials nor voters have shown much appetite for confronting the arithmetic.

This Isn't Just a Revenue Problem

Federal revenues are projected to equal about 17.5% of GDP in 2026, slightly above their 50-year average of 17.3%.

Federal spending, however, is projected at 23.3% of GDP, compared with a 50-year average of 21.2%.

And the gap is projected to get worse.

By 2036, CBO projects spending reaching 24.4% of GDP, while revenues reach 17.8%. The annual deficit would grow to about $3.1 trillion, and debt held by the public would climb from about 101% of GDP to a record 120%.

That doesn't mean taxes don't matter. Tax policy affects economic growth, incentives, investment and federal revenue. Nor does it mean every government expenditure is unnecessary.

It means something simpler:

Government cannot indefinitely spend substantially more than it collects.

Where Is the Money Going?

One popular explanation is that politicians could balance the budget by eliminating waste or trimming discretionary programs.

Waste should certainly be eliminated. But the numbers point to a larger structural problem.

CBO projects that the principal forces pushing federal spending higher over the coming decade will be Social Security, Medicare and interest on the debt. Meanwhile, discretionary spending is projected to decline as a share of the economy.

Health care is particularly important. A recent Tax Foundation analysis puts the combined 2025 cost of federal health programs—Medicare, Medicaid, Affordable Care Act subsidies, veterans' health care and others—plus health-related tax breaks, such as the exclusion for employer-provided insurance, at nearly $2.7 trillion, or 8.9% of GDP. It projects that cost rising to about 9.7% of GDP by 2035.

Social Security faces its own arithmetic. CBO's latest long-term projections show the gap between Social Security's revenues and outlays generally widening, with the Old-Age and Survivors Insurance Trust Fund projected to be exhausted in 2032 under current law.

These are not abstract accounting issues. They represent benefits Americans have been promised—and benefits millions of Americans rely upon.

That is precisely why reform is politically difficult.

Then Comes Interest

Borrowing creates another expense: interest.

As debt accumulates, Washington must devote more money simply to servicing debt incurred in the past. CBO projects net interest rising from 3.3% of GDP in 2026 to 4.6% in 2036, one of the main reasons deficits grow.

That can become a vicious cycle:

Deficits create debt. Debt creates interest. Interest increases spending. Higher spending creates larger deficits and still more debt.

Higher interest rates make that arithmetic worse. Drawing on CBO estimates, the Committee for a Responsible Federal Budget reports that rates one percentage point above CBO's projections would add about $1.4 trillion in interest costs over the next decade.

Can't Economic Growth Save Us?

Growth matters enormously.

A larger, more productive economy produces higher incomes, greater opportunity and more tax revenue without necessarily raising tax rates. Policies that encourage entrepreneurship, investment, innovation and productivity—including potentially artificial intelligence—therefore matter to the debt discussion.

But growth alone is unlikely to solve the problem.

The Committee for a Responsible Federal Budget estimates that even 0.1 percentage point of faster annual growth would cut deficits by about $220 billion over the next decade.

Holding debt near its current share of GDP through growth alone would require sustained real growth of about 3.3% a year, compared with CBO's projected rate of about 1.8%.

Growth should be part of the solution. It probably cannot be the entire solution.

We Elected the People Who Did This

It is tempting to blame Washington.

But Washington didn't elect itself.

For decades, politicians of both parties have discovered that voters enjoy government benefits, dislike spending cuts and generally prefer lower taxes. That creates a powerful incentive to promise more than government collects and borrow the difference.

Fiscal conservatism begins with recognizing that there is no free lunch.

A government can tax. It can spend. It can borrow. And it can pursue policies that encourage economic growth.

But it cannot permanently escape the relationship among them.

For an organization committed to liberty, free enterprise and prosperity, that raises a question worth confronting:

If we expect our elected leaders to live within fiscal constraints, are we willing to let them make the difficult choices required to do it?

The debt ultimately belongs not merely to Washington.

It belongs to the country that elected Washington.

Sources

Congressional Budget Office — "The Budget and Economic Outlook: 2026 to 2036," February 2026. Source for spending, revenue, deficit, debt and net interest figures, 50-year averages, and the drivers of rising spending.
cbo.gov →

Congressional Budget Office — "CBO's 2026 Long-Term Projections for Social Security," September 17, 2026. Source for the projected 2032 exhaustion of the Old-Age and Survivors Insurance Trust Fund.
cbo.gov →

Tax Foundation — William McBride and Guy Cardwell, "The Spiraling Cost of Federal Healthcare Subsidies and Carveouts," September 17, 2026. Source for the combined fiscal cost of federal health programs and health-related tax preferences.
taxfoundation.org →

Committee for a Responsible Federal Budget — "Don't Count on Growth to Fix the Debt," September 24, 2026. Source for the deficit effect of faster growth and the growth rate needed to stabilize debt.
crfb.org →

Committee for a Responsible Federal Budget — "CBO: 1% Higher Interest Rates Add Trillions to Debt," September 24, 2026. Source for the added interest cost of higher rates.
crfb.org →