(PD) James Hartley–The Nation That Cried, “Debt!” 

The federal government’s budget deficit is the amount by which spending exceeds revenue; in 2026 that is projected to be $2.1 trillion. The government’s budget debt is the total amount owed to creditors; in 2026 that is projected to be $32 trillion. Those are big numbers. If you personally owed someone $32 trillion, you (and your creditor) might be a bit concerned. 

Obviously, the U.S. government has more resources than you do, so we need a different gauge. The most often-used measure compares the size of the debt to GDP, which measures the total amount of production in the country. The CBO estimates that in 2026, the debt-to-GDP ratio will be around 101 percent. (The only time it was higher—106 percent—was at the end of World War II.) If the U.S. government wanted to pay off its entire debt right now, it would need all of the income generated in the entire economy this year. That seems very alarming until you remember that the government doesn’t have to pay off its entire debt this year. If you have a home mortgage, it is likely that the value of your debt exceeds your current income, but you aren’t worried because you do not have to pay off the entire debt today. 

Nevertheless, when the size of government debt is equal to the size of the GDP, many people get worried. Reinhart and Rogoff, for example, showed that when debt-to-GDP ratios are higher than 90 percent, economic problems arise. But a country with the economic size and power of the current United States can presumably weather a higher ratio than the norm. Theoretically, there is a debt-to-GDP ratio that will create problems even in the largest economy in the world, but we have no way of precisely determining that limit from the experience of smaller countries in the past. 

While it is hard to estimate the effect of the existing debt-to-GDP ratio, the trajectory of that ratio is noteworthy.

Read it all.

Bad news – we cannot grow our way out of the debt. pic.twitter.com/5fWs28zRIX

— Marc Goldwein (@MarcGoldwein) September 24, 2026