The unsustainable national debt poses a risk to our economic future, and young Americans may have the most to lose. Just getting started in their careers, young people already face significant economic headwinds, such as a high cost of living, job market uncertainty, and, oftentimes, student debt. The growing national debt adds to these challenges, compounding the difficulties of finding a job, saving money, and achieving long-term financial success.

This piece examines how our unsustainable debt affects economic opportunities for young people in three key areas of their lives: inflation, housing costs, and the job market.

Rising National Debt Increases the Cost of Living

Rising national debt puts upward pressure on inflation, driving up the cost of goods and services and eroding how far a dollar can be stretched. 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.

That represents a significant loss for young people, who are only beginning to build their savings. According to the Federal Reserve, 36 percent of 18-to-29-year-olds reported having enough savings to cover three months of expenses in 2024, significantly lower than older age groups. With limited savings and lower starting incomes as early-career workers, young people are particularly sensitive to rising prices. Higher costs, especially for non-discretionary items like groceries and housing, consume a larger share of a young person’s budget, making it harder to afford necessities and save for the future.

Rising National Debt Contributes to High Housing Costs

As rising debt pushes up government borrowing costs, interest rates across the economy also climb — including mortgage rates. Recent analysis by the Budget Lab at Yale found that the rise in federal debt and interest rates since 2015 translates to approximately $2,500 more per year in borrowing costs for a family taking out a mortgage in 2025, or $76,000 over the life of the 30-year loan, compared to a world without this additional federal debt.

Those higher housing costs would be difficult to absorb for younger Americans, who are already confronting a housing affordability crisis caused by insufficient housing supply. Rent and housing prices have risen faster than wages and overall inflation over the past two decades, according to the U.S. Department of the Treasury. In this environment, young people face the greatest risk of being rent burdened. According to the Harvard Joint Center for Housing Studies, 60 percent of renter households headed by a young adult under age 25 spent more than 30 percent of their income on rent and utilities in 2023, the highest of any age group.

Combined with a high cost of living, higher interest rates can delay the possibility of homeownership. As a result, young people are more likely to live with their parents and less likely to buy a house now than their counterparts did 30 years ago. Since homeownership is one of the primary ways Americans build wealth, being priced out of the market can translate into a less secure financial future down the road.

Rising Debt Weakens the Job Market

Rising national debt also leads to fewer jobs and lower wages. A 2025 report by EY’s Quantitative Economics and Statistics (QUEST) practice estimates that the debt trajectory would reduce wages by 0.6 percent and the number of jobs available by 1.2 million in 2035. In the long run, the American Action Forum estimates that rising debt will reduce income growth from 2025 to 2055 by 16 percent.

A shrinking job market would be especially difficult for young workers, who are already struggling to find jobs in today’s “low-hire, low-fire” labor market. In August 2025, the unemployment rate reached 9.2 percent among 20-to-24-year-old workers, the highest since the pandemic and more than double the rate of 4.3 percent among the general population. Slower wage growth compounds over a young person’s career, reducing lifetime earnings and slowing wealth-building.

Conclusion

Rising debt worsens economic conditions for young people, who are already battling difficult economic headwinds. With our unsustainable national debt, today’s leaders are saddling young Americans with a heavy burden that will have significant long-term consequences for their economic success. Young people have a lot at stake in how our leaders address our present fiscal challenges. It’s critical that they make their voices heard to put our country — and their futures — on a more prosperous path.