U.S. National Debt Hurtles Toward a Dangerous Tipping Point as Alarms Sound

WASHINGTON — The United States is rapidly approaching a "decisive turning point" in its financial history, according to a nonpartisan budget watchdog that warns current federal borrowing levels have become unsustainable.

The Committee for a Responsible Federal Budget (CRFB) issued the alert following an analysis of the Congressional Budget Office’s (CBO) latest 10-year forecast. The CRFB found that the nation’s current borrowing trajectory is double its historical average.

The assessment emphasizes an urgent need to address the mounting national debt, which the group claims poses significant risks to future economic stability.

Policymakers face increasing pressure to reform federal spending and taxation to avert a potential fiscal crisis.

While recent projections from the Congressional Budget Office (CBO) and the Committee for a Responsible Federal Budget (CRFB) do not necessarily break new ground, their release in early 2026 introduces a period of heightened sensitivity. These findings present a direct challenge to both the administration and Congress, forcing a long-overdue confrontation with U.S. fiscal realities. On Wall Street, such warnings typically serve as catalysts for volatility, as investors increasingly fear the Federal Reserve may be forced to keep interest rates elevated to counter the inflationary pressures of sustained government spending. A prolonged "higher-for-longer" rate environment risks stifling economic expansion and placing significant downward pressure on equity markets.

For U.S. trading partners, most notably Vietnam, the potential fallout is multi-dimensional. A full-scale U.S. sovereign debt crisis would destabilize the global financial architecture. Even in the absence of a crisis, any pivot toward fiscal tightening in Washington would likely dampen consumer demand for imports, dealing a direct blow to export-oriented economies. Furthermore, the uncertainty surrounding U.S. fiscal policy frequently triggers unpredictable fluctuations in the U.S. dollar, complicating Hanoi’s efforts to manage exchange rate stability and calibrate its own monetary policy.

The surging U.S. national debt carries direct consequences for Vietnamese-American families and small business owners. Persistent inflation, driven by high public spending, threatens to erode household savings and diminish purchasing power. More significantly, if the government is forced to raise taxes or cut spending to manage this debt, the backbone of our community—including the nail salon industry, phở restaurants, and local service providers—could face heavier tax burdens and a decline in foot traffic as the broader economy slows. Additionally, high interest rates make securing the capital needed for business expansion increasingly expensive and difficult for entrepreneurs across our community.