Particle.news
Download on the App Store
17 ARTICLES
·
15h ago

U.S. Public Debt Tops GDP for First Time Since World War II

Rising interest costs make the outlook worse without deficit cuts.

The statue of former Treasury Secretary Albert Gallatin stands in front of the north wing of the U.S. Treasury Department headquarters building on April 24, 2025, in Washington, DC.
Image
Sen. Rick Scott (R-FL) is joined by fellow Senate Republicans for a news conference where he urged the White House and Senate Democrats to pass the House GOP legislation that would raise the debt limit and cut federal spending, outside the U.S. Capitol on May 03, 2023 in Washington, DC.
Image

Overview

  • Debt held by the public, which excludes money the government owes itself, edged to about 100.2% of GDP after BEA data Thursday showed $31.27 trillion in public debt versus $31.22 trillion in nominal GDP, with gross federal debt already above $39 trillion.
  • Interest on the debt now exceeds $1 trillion a year and is set to climb, a burden that can raise borrowing costs for mortgages, car loans, credit cards and business investment as government borrowing absorbs more available credit.
  • The Congressional Budget Office projects public debt to reach roughly 108% of GDP by 2030 and about 120% by 2036, with interest costs rising toward $2.1 trillion in the 2030s even if growth and rates stay near current trends.
  • Fiscal watchdogs and business leaders warn the path risks slower growth, higher borrowing costs, inflation pressures and strain on national security, while some economists say the 100% threshold is mostly symbolic and not an automatic crisis point.
  • Policy ideas have resurfaced, including a tougher budget rule dubbed Super PAYGO and calls for a constitutional debt brake, yet there is still no bipartisan plan to deliver the multitrillion-dollar deficit cuts experts say are needed.