A finance professor at the illustrious Wharton Business School has issued a dire warning about America’s ballooning debt.

Professor Joao Gomes, who also serves as Wharton’s senior vice dean of research, thinks the upcoming U.S. presidential election could be the spark that ignites the next major financial crisis.

The consequences could be felt as early as next year.

“I probably worry about the U.S. debt more than most of my professional colleagues,” Gomes said on social media platform X. “But in this election year, I believe voters should ask much tougher questions of politicians that don’t take this threat seriously.”

In his view, the next president-elect—whoever that may be—will kickstart another massive spending spree, adding to Washington’s already nauseating $34 trillion debt. At some point, Uncle Sam’s spending habit is going to trigger a financial crisis that spreads throughout the world.

“It could derail the next administration, frankly. If they come up with plans for large tax cuts or another big fiscal stimulus, the markets could rebel, interest rates could just spike right there, and we would have a crisis in 2025,” he said.

Whether it happens in 2025 or not, “I’m very confident by the end of the decade, one way or another, we will be there,” Gomes predicted.

It’s easy to dismiss the federal debt as somebody else’s problem, especially when the Fed can just print money to buy all the bonds the government issues to fund its spending spree.

Unfortunately, that “solution,” if you can call it that, isn’t sustainable.

The problem with massive deficits

Governments often run deficits to support their economies, with the stated goal of paying down their debt once GDP is growing and tax revenues are on the rise.

But in the case of the U.S., debt-to-GDP has reached an unprecedented 123%.

“If the U.S. were a household, we might measure its debt by the debt-to-income ratio. The debt is about 1.3 times the national income,” Laura Veldkamp, a finance professor at Columbia University, told Fortune.

But how can a ballooning deficit lead to a full-blown crisis? It begins with a crisis of confidence, as governments allocate more money to servicing the debt—and less toward public services.

That already appears to be underway after Washington’s interest payments surpassed annual defense spending for the first time. With interest rates rising since 2022, annualized interest payments on the federal debt reached an eye-popping $1.1 trillion, or 25% of the government’s revenues for the year.

“It’s only going to get worse from here, at least for a while,” Marc Goldwein, a senior policy director for the Committee for a Responsible Federal Budget, said of interest payments.

“Every dollar that goes toward interest payments means less resources available to build a stronger, more resilient future,” according to the Peter G. Peterson Foundation, a nonpartisan organization.

More dollars to service the debt eventually leads to economic stagnation, shrinking prosperity, and a more difficult path for future generations who inherit the deficits.

This is further echoed by the Council of Foreign Relations (CFR), which warned of a “tipping point beyond which large accumulations of government debt begin to slow growth.”

“Under this scenario, investors could lose confidence in Washington’s ability to right its fiscal ship and become unwilling to finance U.S. borrowing without much higher interest rates. This would result in even larger borrowing costs, or what is sometimes called a debt spiral. A fiscal crisis of this nature could necessitate sudden and economically painful spending cuts or tax increases,” CFR explained.

As it turns out, many experts were able to correctly predict that the federal debt would continue to shatter records. They also see what comes next—and it’s not pretty.

A predictable crisis

In a recent panel discussion at the Bipartisan Policy Center, former House Speaker Paul Ryan called the federal debt “the most predictable crisis we’ve ever had.”

Fellow panelist and JPMorgan CEO Jamie Dimon agreed, adding that the debt could look like a “hockey stick” when future generations draw it on a chart.

“It is a cliff; we see the cliff,” Dimon said. “It’s about 10 years out; we’re going 60 miles an hour [toward it],” he explained.

Economist Peter Schiff, who has long predicted the compounding of the federal debt, believes deficit spending will continue.

“2024 will set a record for the largest one-year increase in the U.S. National Debt in history,” he said. “The only question is, will there be a sovereign debt or dollar crisis before the year ends.”

Although some economists take a more nuanced approach toward the federal debt, it really comes down to asking what the money was used for.

“Instead of focusing on the level of debt, we should be asking: What is the return on the investment?” professor Veldkamp asked. “If the government is issuing debt to invest in high-return projects, then debt is good. If it is not, then the debt will be tough to pay off because of low future productivity.”

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, thinks the return on government spending hasn’t been worth it.

“We already spend more on interest than we spend on children or Medicaid, and in just three years, we’ll spend more on interest payments than we do on national defense,” she told Fox Business. “And that’s absent higher rates than projected—for every 1 percentage point increase in rates above projections, deficits will be $2.7 trillion higher over the next decade than projected.”