Studies warn rising government and global debt is squeezing incomes and public investment

Rising debt is creating mounting economic risks worldwide, with one new study arguing that reducing the U.S. federal deficit could substantially improve household finances while economists warn of a broader global debt cycle.

Fortune reported that tackling the roughly $40 trillion U.S. national debt could increase household income by $36,000, citing a new study. The limited material provided does not specify the time period over which that increase would occur, the study’s authors or the assumptions behind the estimate.

The study also argued that deficit reduction could help lower inflation by weakening expectations of future price increases. Its reasoning is that households and markets may otherwise expect future policymakers to tolerate or encourage inflation as a way to reduce the debt’s value in real terms. That claim describes a projected economic effect rather than an observed outcome.

Separately, CNBC reported that global debt has surpassed $365 trillion. Economists cited by the outlet warned of a “vicious cycle” as higher debt produces larger interest bills, potentially limiting governments’ capacity to fund other priorities. According to CNBC, advanced economies now pay more in debt interest than the entire world spends on artificial intelligence, defense or clean technology.

Together, the reports highlight the growing cost of debt, although the supplied summaries do not provide enough methodological detail to independently assess the projections or spending comparison.