‘It will become a problem': Jamie Dimon says America's $39 trillion debt will mean volatile markets and rising rates — he just doesn't know when

The technical term for those investors is "bond vigilantes." If the government's borrowing becomes more expensive because these investors are pushing back, the higher rates will affect the job market and the whole economy.

"The way it would exhibit itself is volatile markets, rates going up… bond vigilantes, people not wanting to buy United States Treasuries," Dimon said. "The U.S. will still be the best economy, but they'll not want to own U.S. Treasuries (1)".

Right now, the U.S. pays more than $1 trillion a year just in interest on its debt (2) — and that figure is expected to double in the next ten years, according to the Congressional Budget Office.

To put that in perspective, the entire federal government spent about $7 trillion in 2025, which also means that the government now spends 20% of every tax dollar collected just to pay the interest on previous debt.

The opportunity America missed

Dimon also pointed to the one time the U.S. had a real shot at fixing this problem and didn't.

Back in 2010, President Barack Obama created a bipartisan commission to tackle the bloating national debt. It was called the Simpson-Bowles Commission (3), named after its two co-chairs, Republican Senator Alan Simpson and Democrat Erskine Bowles.

The commission put together a plan to cut discretionary spending, reform the tax code, and reshape healthcare costs. It was detailed and politically painful enough that both sides had something to hate about it.

But Congress couldn't reach a consensus, so they didn't pass it.

"Years ago, we had a solution, the Simpson-Bowles Commission. It didn't get done," Dimon said (1). "I wish it had gotten done. It would have been a home run for all Americans, and it would have resolved some of these issues."

Instead, the U.S. keeps running an annual budget deficit, where the government spends more than it collects in taxes each year.

Why fixing it is so challenging

A big part of the problem is that most federal spending isn't optional.

Of the roughly $7 trillion the government spent in 2025, it spent about $4.2 trillion on mandatory outlays.

Mandatory outlays are the money the federal government pays out that are required by law, like Medicare, Medicaid and Social Security, to cover healthcare and retirement income for tens of millions of Americans (2).

Dimon describes these spendings as being "set in stone." You can't just cut it without taking away benefits that people have paid into for decades and are currently depending on to survive.

That leaves the remaining $2.8 trillion, that's already stretched across defense, education, infrastructure, and everything else, as the only flexible part of the budget. And $1 trillion of that is now going straight to interest payments.

Both parties know this. That's part of what frustrates Dimon. He's been walking the halls of Congress for years and says almost everyone he talks to understands the math.

"Neither Democrats nor Republicans have really focused on this for a while," he said (1). "It's just we haven't had the will yet to actually deal with it".

The debt-to-GDP problem

Economists track how much the U.S. owes, and how that debt compares to the size of the economy.

The current debt-to-GDP ratio is around 123% (4), which means the country owes roughly $1.23 for every $1 it produces in a year..

Think of it like a household that earns $100,000 a year but carries $123,000 in debt. It's manageable, as long as that household keeps their interest rates low, and their income keeps growing.

Dimon believes the U.S. should focus on growing their income rather than cutting budgets. He says the U.S. should be aiming for 3% annual GDP growth — not the roughly 2% it's been averaging.