The United States’ national debt has reached an unprecedented $36.2 trillion, sparking intensifying concern from economists and financial institutions.

The escalating debt burden has prompted warnings that the country’s long-standing fiscal credibility may be at risk, especially as growth in the economy may no longer be sufficient to sustain rising interest payments and public spending.

One of the most significant recent developments came from Moody’s Investors Service, which downgraded the U.S. credit rating from Aaa to Aa1.

This move reflects growing skepticism about America’s fiscal trajectory and its ability to manage its mounting debt.

In its statement, Moody’s acknowledged the U.S.’s strong economic and financial institutions but concluded that these strengths “no longer fully counterbalance the decline in fiscal metrics.”

While the downgrade doesn’t immediately alter market dynamics, analysts caution that it could signal a slow erosion of confidence.

Deutsche Bank strategist Jim Reid, in a note cited by Fortune, described the situation as feeling “somewhere along the line of a ‘death by a thousand cuts’ with regards to the U.S. fiscal situation.”

He emphasized that while immediate effects may seem muted, the accumulation of fiscal stress continues to mount against the “debt sustainability dam.”

Economists have long criticized Washington’s fiscal strategies as inadequate. Proposed plans to rein in the debt are widely viewed as insufficient or poorly timed.

With interest payments consuming a growing share of the federal budget, the risk increases that the debt could spiral further out of control if left unaddressed.

Within the political sphere, President Trump and his administration have acknowledged the debt challenge but are pursuing a strategy that has raised eyebrows.

The Trump administration is promoting a series of tax cuts, including the expansion of the 2017 tax reductions set to expire in 2025. Proposals include eliminating taxes on tips and overtime pay, part of what the administration has called a “big, beautiful bill.”

Simultaneously, the Department of Government Efficiency (DOGE) is emphasizing cost-cutting and streamlined government operations.

However, the administration faces the difficult task of balancing tax reductions with the need to increase government revenue—a tension that could further complicate efforts to bring the debt under control.

As economists and credit agencies continue to ring alarm bells, the national debt is becoming an increasingly pressing issue—not just for markets and policymakers, but for the long-term health of the U.S. economy.