A brief look at the past
At the end of the 2024 calendar year, the U.S. government has accumulated around $30 trillion of debt (this includes both the debt held by the public and the intra-governmental debt) or 120% of GDP. According to the Congressional Budget Office, the debt-to-GDP ratio is projected to climb to 166% in 2054.
A high level of debt to GDP however is not by itself concerning. Since the sovereign debt is not aimed at ever being repaid, what matters a lot more is the cost of maintaining and rolling over such debt indefinitely. In 2024, the U.S. government spent 3% of GDP in interest expense, one of the highest level in history. This came as the result of (i) rapidly increasing amount of debt, especially following the 2020-2021 government’s response to the COVID pandemic, and (ii) the increase in short-term interest rates from the Federal Reserve starting in 2022.