The United States is adding to the national debt faster than ever, and Americans will find themselves paying for it. As the federal government continues to borrow trillion after trillion, the rising debt contributes to higher inflation and interest rates, which can have significant negative consequences for American families and businesses. Not only that, the debt inhibits economic growth, wages, and jobs — weighing down the prospects of achieving the American dream.

Below are five ways that the unsustainably rising national debt can make life less affordable.

1. Eroded purchasing power. Rising debt puts upward pressure on inflation, driving up the cost of goods and services across the economy and eroding the value of Americans’ savings. As the cost of living rises, Americans’ paychecks stretch less they used to, and their disposable income shrinks. A report from the Budget Lab at Yale found that five years after a permanent primary deficit increase of 1 percent of gross domestic product (GDP), households would lose $300–$1,250 in purchasing power.
2. Stagnant wages and fewer jobs. The rising national debt significantly harms economic opportunities for Americans. Analysis conducted by EY’s Quantitative Economics and Statistics (QUEST) practice from May 2025 found that the debt trajectory would reduce the number of jobs in the U.S. by 1.2 million and decrease wages by 0.6 percent by 2035. Now, with the One Big Beautiful Bill Act (enacted in July 2025) projected to add an additional $4.1 trillion to the national debt by 2034, the actual impact on jobs and wages is likely even larger. In the long run, the American Action Forum estimates that rising debt will reduce income growth from 2025 to 2055 by 16 percent. Stagnant wages and fewer jobs indicate a weakening labor market and economy — one in which Americans will face difficulties with economic mobility, saving for retirement, and affording necessities.
3. Higher mortgage costs. Mortgage rates closely track 10-year Treasury yields. As can rise as well, making homeownership more difficult for Americans to achieve. For example, an analysis by the Budget Lab at Yale found that a increase of 1 percent of GDP increases interest payments on a median home by $600–$1,240 per year. This represents an additional burden to American households beyond already high housing prices, which have outpaced both inflation and median household income over the past two decades.
4. More expensive car payments. The average new car payment increased 22 percent from $636 in 2021 to $774 in 2025. In addition to climbing vehicle prices, a contributing driver of increased costs are interest rates, which rose from 4.67 percent in 2021 to 7.22 percent in 2025. Similar to mortgages, interest rates on auto loans can be sensitive to changes in the cost of government borrowing, and as the rising national debt puts upward pressure on interest rates, car payments can become more expensive for Americans.
5. Bigger student loan payments. Economists have long shown how mounting national debt can drive up 10-year Treasury yields, which determine the cost of federal student borrowing. Federal student loan interest rates are set annually by adding a fixed percentage to the yield, up to a certain limit. Thus, as the national debt grows, so can the cost of borrowing for education, adding to the financial burden already faced by millions of American students and families. According to the Bipartisan Policy Center, a college student who took out federal loans in the 2020-21 academic year with a 2.75 percent interest rate will pay $4,247 in total interest payments over a standard 10-year repayment period. In contrast, a student with the same loan amount in 2024-25 will pay $10,677 — more than double, due solely to a higher interest rate of 6.53 percent.

Conclusion

The unsustainably rising debt matters for a range of “kitchen table” economic issues for Americans. By pushing interest rates and inflation higher, the national debt has far-reaching implications across key aspects of daily life, from mortgage payments to wage growth. With affordability a defining concern for voters, stabilizing the debt should be a key part of this election year’s campaign conversation.

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