U.S. public debt is no longer merely a fiscal issue associated with budget deficits or rising borrowing costs. Nor is public financial management an exclusively domestic matter detached from foreign and defense policy calculations. As U.S. public debt approaches $40 trillion, with projections indicating further increases in the coming years, the relationship between financial power and geopolitical capacity has become increasingly evident, placing public finance directly within the framework of U.S. national security. The issue is not so much whether the United States will lose its ability to finance itself, but rather the rising cost of maintaining American power, the government’s capacity to manage its debt, preserve market confidence, and ensure continued global demand for the U.S. dollar and Treasury securities.
The Treasury Market
The importance of this issue stems from the nature of the U.S. financial system. The United States does not borrow solely to finance government spending; it also relies on the Treasury securities market as one of the central pillars of the global financial system. Consequently, rising debt does not simply represent an increase in a figure recorded in the Treasury Department’s accounts. It also reflects the expansion of obligations that the government must continuously refinance. In 2025, the United States raised the statutory debt ceiling from $36.104 trillion to $41.104 trillion, reflecting the growing fiscal space required to accommodate the current trajectory of spending and deficits. The Treasury Department also projected that, during the third quarter of 2026, it would borrow $739 billion in net marketable debt held by the private sector, followed by $628 billion in the fourth quarter. This confirms that borrowing has become a structural component of U.S. fiscal management rather than an exceptional instrument associated with temporary circumstances.
The Interest Bill
The fiscal trajectory becomes more concerning when the focus shifts from the size of the debt to the cost of servicing it. The U.S. Congressional Budget Office projects that net interest payments on the debt will reach approximately $1 trillion in fiscal year 2026, equivalent to 3.3% of gross domestic product, before rising to $2.1 trillion by 2036, or approximately 4.6% of GDP. These figures indicate that an increasing share of government resources will be directed toward debt servicing rather than toward expenditures capable of raising productivity, strengthening investment, or supporting defense capabilities. More importantly, this increase does not require a financial crisis to become a strategic problem. It is sufficient for high debt levels to persist while interest rates remain above their pre-COVID-19 levels for the interest burden to gradually increase.
Historic Levels
According to projections by the Congressional Budget Office, federal debt held by the public is expected to rise from approximately 101% of GDP at the end of 2026 to 108% in 2030, and then to 120% in 2036. This would exceed the previous historical peak of approximately 106% of GDP in 1946, in the aftermath of World War II. This comparison carries significant implications. The United States is not currently engaged in a comprehensive global war that is temporarily draining public finances. Nevertheless, debt levels are approaching those historically associated with exceptional circumstances, reflecting the structural nature of the problem rather than a merely temporary condition.
Financing Power
It is precisely here that the direct link between public finance and national security becomes apparent. Military power requires a sustainable financial foundation. The ability to finance aircraft carriers, advanced aircraft, missiles, missile-defense systems, space capabilities, cybersecurity, and military deployment networks around the world depends not only on technological superiority but also on the state’s capacity to bear the financial costs of maintaining that superiority over several decades. In its fiscal year 2026 defense budget request, the U.S. Department of Defense sought approximately $848.3 billion in discretionary funding, while the total national defense request, including reconciliation provisions, amounted to approximately $1.012 trillion. This illustrates the scale of resources required to preserve American military superiority in a strategic environment marked by intensifying competition with China and growing international tensions.
The Spending Equation
The problem is not that the United States is incapable of financing defense spending. It still possesses the world’s largest individual economic and financial base. Rather, the challenge lies in the opportunity cost. Every additional dollar allocated to interest payments on the debt is a dollar that cannot be directed toward another area without either increasing borrowing or reducing spending. Consequently, competition among defense spending, social expenditure, investment, and infrastructure is no longer merely an accounting issue. It has become part of the broader strategic question of how American economic power will be allocated over the coming decades. The Congressional Budget Office has clearly indicated that rising interest costs represent one of the principal factors driving the deficit to higher levels over the next decade.
The Power of the Dollar
Nevertheless, U.S. debt cannot be analyzed from a national security perspective without considering the exceptional advantage enjoyed by Washington: most of its debt is denominated in dollars, while the dollar remains the central currency of the global monetary system. Data from the International Monetary Fund showed that the dollar accounted for 57.13% of global official foreign-exchange reserves in the first quarter of 2026. This share gives the United States an exceptional ability to access global financing and enables the U.S. Treasury to issue substantial amounts of debt while maintaining a broad global investor base willing to hold dollar-denominated assets.
Financial Depth
This advantage provides Washington with what may be described as “strategic financial depth.” At the same time, however, it may become a source of excessive confidence. Possessing the world’s reserve currency does not imply unlimited borrowing capacity. Confidence in the dollar is not the result of a unilateral American decision; rather, it reflects the interaction of several factors, including the strength of the U.S. economy, the depth of capital markets, the independence of monetary institutions, the rule of law, the liquidity of the Treasury market, and the absence of a fully developed global alternative to the dollar. Therefore, the continued rise in debt and deficits does not automatically imply the collapse of the dollar. It may, however, gradually increase the cost of maintaining its international position if global markets begin to perceive U.S. fiscal policy as moving in an increasingly unsustainable direction.
Treasury Yields
The sensitivity of this equation is particularly evident in the U.S. Treasury market. Data from the U.S. Treasury Department indicated that the yield on ten-year Treasury bonds exceeded 4% in early September 2026, while yields on longer-term maturities rose to even higher levels. These developments are highly significant because an increase in the yield on newly issued debt raises the cost the government will bear when refinancing maturing obligations. If this occurs alongside persistently high deficits, debt may enter a self-reinforcing cycle in which higher interest rates increase the debt burden, while rising debt, in turn, increases the risk premium demanded by investors. This dynamic does not necessarily imply an imminent crisis, but it makes public financial management more closely connected to the stability of American power.
Financial Influence
This helps explain why fiscal policy has indirectly become part of foreign policy. The United States uses sanctions, financial restrictions, and the dollar-based system as instruments of economic power. It also benefits from the dollar’s centrality and from the ability of its financial institutions to influence international capital flows and global trade. However, the effectiveness of these instruments depends, to a significant extent, on continued confidence in the American financial system itself. Maintaining financial stability is therefore no longer merely a domestic economic objective; it has become a prerequisite for sustaining one of the most important instruments of U.S. influence in the world.
The Absence of Collapse
At the same time, describing a potential “U.S. collapse because of debt” represents an excessive simplification of the situation. The U.S. economy continues to possess enormous productive and technological capabilities. Its financial market remains the deepest in the world, the dollar retains a dominant position in international reserves, and U.S. Treasury securities remain among the most important safe assets underpinning the global financial system. Accordingly, the central question is not whether the United States will collapse under the burden of its debt, but whether it will be able to correct its fiscal trajectory before debt servicing evolves from a manageable factor into a strategic constraint limiting its ability to finance American power.
The Strategic Constraint
U.S. debt should therefore be viewed as a fundamental variable in the national security equation, alongside military power, technology, energy, supply chains, and industrial capacity. The United States may be able to engage in military confrontation, but it must finance it. It may be able to impose economic sanctions, but it must preserve confidence in the dollar-based system. It may also increase defense spending, but it requires sufficient fiscal space to sustain that expenditure. Fiscal reform in the United States thus becomes part of the broader strategy of American power, because a state possessing the world’s most powerful military ultimately requires a financial foundation capable of bearing its costs.
Strategic Conclusion
In conclusion, U.S. debt does not currently constitute a weakness capable of undermining American power. However, it is gradually becoming one of the most important constraints that Washington must incorporate into its strategic calculations. With the Congressional Budget Office projecting that debt will reach 120% of GDP by 2036, and net interest payments rise to $2.1 trillion, the equation becomes increasingly clear: American power in the twenty-first century will be determined not only by Washington’s ability to produce weapons or deploy forces, but also by its capacity to achieve growth, manage debt, maintain confidence in the dollar, and create sufficient fiscal space to finance its power when necessary. In this precise sense, public finance has become an inseparable component of U.S. national security.
