The national debt hit $38 trillion yesterday. It was $37 trillion in August and it’s only going up from here. In fact, the pile of money the U.S. government owes — to investors here at home and around the world — is currently about the size of the entire United States economy.  

But what does such a large national debt mean for you or anyone else individually?

“A large national debt is damaging to the country in so many ways,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “The problem is, most of it’s invisible. You don’t really realize it.”

Take for example, interest rates and mortgages.

“If, in fact, we didn’t have this debt outlook, interest rates almost certainly would be at their pre-COVID level,” said Kent Smetters, director of the Penn Wharton Budget Model. “So, you remember the good old 3-3.5% mortgage rates, that would actually still happen today.”

As the government borrows more and more, it makes it more expensive for everyone else to borrow. Because everyone’s fighting for a loan, whether it’s you for a car loan or the government for a bond. And as the government fights harder, interest rates rise. Mortgages are just the start.

“If you’re choking off some of the money that might go to investments for small businesses or new private sector investments, and you’re using that for consumption in the federal government, it means that we are growing our economy more slowly than we otherwise would,” said MacGuineas.

More concerning than the size of the debt may be its growth trajectory. Last year the government spent 13% of the whole budget just on interest. The Congressional Budget Office says the GOP tax and spending bill will add $3.5 trillion to the debt over 10 years. 

“At some point it will be at a level where we can’t manage it anymore,” said Len Burman, a fellow at the Urban Institute. “And at that point it could create a real crisis.”

When exactly that point will come is not known. The Penn Wharton Budget Model predicts that when the debt-to-GDP ratio reaches 200% it’ll be mathematically impossible for the U.S. to pay it off, and that would happen within 20 years. The government may need to print money to pay its debts, which unleashes inflation and sends interests rates skyrocketing. And it would have to cut spending or raise taxes so abruptly it would cause widespread economic trauma.

“If we deal with it now, we can do it in an orderly way, which entails, you know, little or no real economic repercussions,” Burman said.

But it may take a crisis to get change.