The United States’ borrowing trend is on track to place an “undue burden on future generations,” an economic think tank has cautioned, arguing that younger Americans could inherit a tougher financial landscape—marked by higher interest rates, weaker growth, and slower wage gains.
New analysis from the American Action Forum echoes a broader unease that stretches from Wall Street to Washington. JPMorganChase CEO Jamie Dimon and Federal Reserve Chair Jerome Powell are among those raising concerns about the nation’s roughly $38 trillion debt load. In the opening months of fiscal year 2026, the government has been spending about $10 billion a week just to cover interest payments.
Economists worry the U.S. could eventually reach a tipping point where government borrowing outpaces the economy’s ability to grow into it. If that happens, investors may demand higher yields to compensate for the risk, driving up borrowing costs. One fear is that the central bank could feel pressure to step in by expanding the money supply—potentially reigniting inflation—before lawmakers are forced into painful spending cuts.
Bridgewater Associates founder Ray Dalio has compared such a moment to an economic “heart attack,” warning that rising debt-service costs could crowd out productive investment as more federal resources are devoted to meeting past obligations.
That burden would fall most heavily on younger people, said Jordan Haring, the American Action Forum’s director of fiscal policy. Haring, who previously served as a senior policy analyst at the Committee for a Responsible Federal Budget (CRFB), wrote this week that elevated debt levels “exacerbate generational imbalances,” ultimately leaving younger and future Americans facing higher interest costs, slower economic and income growth, and greater pressure to absorb tax increases or spending reductions.
Without major changes, she warned, future budgets could become increasingly locked into servicing older borrowing—shrinking room for spending that supports long-term opportunity. As interest costs climb, the government could have less flexibility to fund priorities such as education, infrastructure, and scientific research. The result, she argued, may be higher taxes, fewer public services, or both—simply to pay for deficits incurred in prior years.
Haring also pointed to the stark differences in how the federal government allocates resources across programs. In 2025, the Department of Education requested $82.4 billion, while Medicaid spending in 2024 exceeded $900 billion, according to the Medicaid and CHIP Payment and Access Commission.
Demographics could intensify the squeeze. An aging population is expected to raise demand for social and health spending, while lower birth rates mean fewer workers entering the labor force—potentially slowing economic growth and narrowing the tax base that supports federal revenue.
Although critics have challenged the accuracy of the think tank’s work in the past, Haring’s argument aligns with warnings voiced by major financial leaders, including BlackRock CEO Larry Fink.
Last year, Fink urged business and political leaders to undertake “an organized, high-level effort” to rethink the retirement system. In his annual letter to investors, he argued that policymakers have prioritized preserving entitlement benefits for older Americans—even if that risks Social Security falling short of full obligations for younger workers by the time they retire.
Fink added that it’s unsurprising many millennials and Gen Z feel economically anxious. In his view, they believe baby boomers have protected their own financial stability at the expense of the next generation—and, at least when it comes to retirement policy, he said they have a point.
The Great Wealth Transfer as a Possible Pressure Point
As economic power shifts from one generation to the next, an enormous wave of inherited wealth is expected to follow—something many governments may see as a potential revenue source.
Some studies estimate that as much as $124 trillion could move from older generations to younger ones over the next 20 to 30 years, while UBS places the total closer to $80 trillion. Baby boomers—those born between 1946 and 1964—hold more wealth than any generation before them. As they pass on assets, large sums are expected to flow to Gen X, millennials, and Gen Z, with some also going to spouses.
Experts say that transfer is arriving at an awkward moment: many governments around the world are carrying high debt and persistent deficits. As wealth changes hands, it may be unrealistic to expect policymakers to ignore it. Instead, governments may attempt to capture a share of those assets to stabilize public finances. But doing so could also divert funds away from private investment—reducing the capital available to businesses and markets at a time when growth is already under strain.
