The U.S. national debt is inching closer to $35 trillion, but according to Fed Chair Jerome Powell, that’s not even the worst part.

Speaking on a panel organized by the European Central Bank, Powell warned that Washington’s massive deficit is growing at a pace that doesn't make sense for a country with supposedly near full employment.

“The level of debt we have is not unsustainable, but the path that we’re on is unsustainable,” Powell remarked while urging U.S. policymakers to prioritize fiscal sustainability.

“In the longer run, we’ll have to do something sooner or later, and sooner will be better than later,” he said.

Since June 2023, the national debt has grown by roughly $1 trillion every 100 days, much faster than the eight months it took to borrow the same amount between 2022 and 2023.

With the presidential elections only four months away, there doesn’t appear to be any political will to rein in spending.

Because of that, Moody’s credit rating agency “expects that the U.S.’s fiscal deficits will remain very large, significantly weakening debt affordability.”

Debt affordability has become a bigger problem since 2022, when the Fed began raising interest rates to combat inflation. A year later, interest payments on America’s debt exceeded total defense spending by 34%.

Economists warn that Uncle Sam’s fiscal mess could undermine government programs at a time when Americans need them the most.

When deficits become too large

At nearly $35 trillion, kicking the can down the road on America’s deficit is no longer possible, according to Mark Duggan, a director at the Stanford Institute for Economic Policy Research.

At a recent policy conference, Duggan told nearly 530 academics, policymakers, and business leaders that the current pace of deficit spending poses “many challenges.”

“Social security is facing insolvency. Our aging population and declining birth rates are posing some unique challenges, and our country’s politics are more polarized than ever,” he said.

According to a May report from the Social Security & Medicare Trustees, the country’s Social Security reserves are forecast to run out in 2035.

At that time, the fund will only be able to pay 83% of retirees’ full benefits. This is a major problem, given that roughly 67 million Americans received Social Security benefits as of February.

As the Economic Policy Institute explains, the government’s massive deficits will impact Social Security payments unless Congress finds new ways to shore up the program’s finances.

“We totally know how to fix this,” but there’s a lack of political will to do so, said Maya MacGuineas of the Committee for a Responsible Federal Budget. “

People just have politicians telling them they can have it all and not pay for it,” she said.