The national debt has ballooned to $33.8 trillion dollars, which is 124% of the United States' GDP. Yahoo Finance spoke to Moody's Analytics Chief Economist Mark Zandi, who outlined why this is a "big problem" for the country claiming that "we are going to be paying, soon, more in interest expense on our debt than we do to fund our defense budget." Questions now arise as to how serious the problem is and what steps can the government take to alleviate this issue.

Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB), joins the Live show to give insight into what steps the government can take and how much investors need to worry about this mounting issue.

"If you take this year so far in terms of our actual deficit, how much we borrowed, it was much worse than it should have been — it basically doubled from a previous year during a period where the economy was strong," MacGuineas says. "But at the same time, lawmakers actually passed policies that improved the situation significantly. Really notable because it's the first time that's happened in a decade."

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

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DIANE KING HALL: The nation's debt stands at about $33.8 trillion. That's about 124% of the country's GDP. The government can only really raise taxes and cut spending, but is that enough to get a handle on the debt. Lawmakers are working on it. Some are calling on a commission to come up with realistic ways to approach it. Last week, we spoke to Mark Zandi, chief economist at Moody's, about the ballooning debt. And this is what he had to say.

MARK ZANDI: It's a big problem because debt plus higher rates means higher interest payments. Here's a factoid for you. We're going to be paying soon more in interest expense on our debt than we do to fund the our defense budget. I mean, that doesn't make any sense whatsoever. So we've got to make some changes.

And if you look at current law, if we make no changes in tax policy or spending policy, it's just unsustainable. Our debt load is going to rise to a place where the interest rates are going to rise. The economy is going to cave under the weight of all of that. So we've got to make some changes.

DIANE KING HALL: Now as the year wraps up it's time to balance the country's checkbook and how it impacts markets. For more on this, we have Maya MacGuineas of the Committee for a Responsible Federal Budget president. So, Maya, we want to weigh in on this with the debt thermometer, if you will. What does the debt thermometer tell us about where we stand? And are we in a danger zone?