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U.S. Debt Tops 100% of GDP
- jdw64 7mo agoJesus died carrying humanity’s original sin. Recently, President Trump seemed to cosplay as Jesus. In that case, could he also die carrying America’s economic original sin and thereby cancel the U.S. national debt?
- acnomics 7mo agoIt’s not as good as it might sound. By “canceling” US debt, it would mean that the government failed to pay back those who lent it money, of whom the majority are US nationals themselves.
- deleted 7mo ago[deleted]
- JumpCrisscross 7mo ago> majority are US nationals themselves Including banks and pension funds, all of which would go broke overnight if the U.S. actually defaulted.
- mandeepj 7mo agoWell, he’s single handedly responsible for 1/3 of the debt! And, will add more before his term ends either by force, naturally, or duration completion. He don’t know how to cancel debt, but would happily add more to it and laughingly take home that cash.
- tnelsond4 7mo agoCongress is in charge of budgets, Trump isn't a dictator so he can't actually do whatever he wants.
- HumblyTossed 7mo agoYou should tag this with sarcasm...
- tnelsond4 7mo agoI don't think I've unlocked that feature yet.
- testing22321 7mo agoThe dude started a war that has already cost $25 billion so far without any approval from congress. It’s mighty clear he can do whatever he wants, and spend huge sums of money doing it.
- mandeepj 7mo agoNot counting the damages to US bases; it’s pretty significant. https://www.cnn.com/2026/05/01/world/video/us-military-bases-iran-strikes-images-invs-digvid https://www.cnn.com/2026/05/01/world/video/us-military-bases...
- cindyllm 7mo ago[dead]
- senectus1 7mo ago>Jesus died carrying humanity’s original sin. I dont think I'll ever understand how this isnt regarded as just fanfic.
- solid_fuel 7mo agoJesus (who is also God), died so that God (who is also Jesus), wouldn't be mad at us - who He created - for sinning (breaking the rules that God (who is also Jesus) made). He had to do this because although He is omnipotent and omniscient, He was unable to forgive us without literally pinning our sins on His Son Jesus (who is also God) and then letting us kill him for it. It makes perfect sense and has no contradictions when someone teaches it to you every Sunday during your childhood.
- tootie 7mo agoThis isn't great but it also isn't a magic threshold. GDP is annual economic activity and debt is cumulative.
- Supermancho 7mo agoInflation is also a factor, in absolute terms. In 2025, interest payments totaled $970 billion, or 3.2% of GDP. The US public debt-to-GDP ratio peaked at 106% in 1946 following WW2. Next year the US will likely match or exceed that, imo.
- sobriquet9 7mo agoWhat's the point of comparing quantities expressed in different units? Debt is in dollars, GDP is in dollars per year.
- deepsquirrelnet 7mo agoAnd now debt is 1 GDP year. I don’t see the problem.
- nyeah 7mo agoA ratio (e.g. 100%) of quantities expressed in different units can be useful. "How many years of GDP is the debt?" Miles per gallon is another example. It's a useful number.
- interestpiqued 7mo agoGDP is literally just in dollars as a unit
- divbzero 7mo agoGDP provides a rough measure for how fast a country could drain its debt—similar to looking at debt-to-income ratio when issuing mortgages to individuals.
- Zigurd 7mo agoNations also have debt to income ratios. We should be comparing those instead of debt to GDP. If you've ever seen one of those UK is poor than Alabama memes, you know that GDP is a poor and tendentious measure of well-being because UK quality of life measures put it above all about the richest states in the US.
- j16sdiz 7mo ago"debt" here is government debt -- federal debt to be precise. "GDP" is just a measurement of economic activity. It is not a measurement of income. It is not government income. It is not even government cash flow.
- 7mo ago
- gortok 7mo agoHere’s the issue. We don’t have any serious leaders on this issue. We don’t have scholarship divorced from politics about this issue. Maybe we never will. The Austrian school basically thinks this is the end of the world. The MMT folks think this is business as usual. The Keynesians are somewhere in the middle, but being in the middle of the road politically is not the same as an apolitical view on this. As a lay person who hasn’t studied economics enough to understand if this is an actual issue or a theoretical issue, I really need some politics-free scholarship on this. It doesn’t help that our political leaders say it’s an issue, unless it’s their party that wants that spending, then it’s fine. The right says it’s fine as long as it goes to endless wars, and the left says it’s fine when we spend the money on social programs. Both say it’s bad when the other side spends it, but not when their own spends it. This is exhausting and demonstrably not helping us resolve the fundamental issue of how do you manage a large society without it imploding.
- outside1234 7mo ago1/3 of the debt has come under Trump. This isn't political, it is just a fact. He passed tax cuts (which are the real debt driver) that are just not sustainable. Without those, we have a reasonable debt to GDP ratio.
- KK7NIL 7mo agoAnd the other side would say that if we cut welfare spending we'd have a reasonable debt to GDP ratio. It's very much political and it's a joke to pretend otherwise.
- bilbo0s 7mo agoThis is kind of the point though. Cutting welfare spending will get us no where. The majority components of the federal budget are Defense, SS/Medicare/Medicaid, and debt payments. Not the forestry service or what we commonly know as welfare. At this point, even cutting everything else to zero still lands us in deficit. (Unless taxes are raised.) To be serious, we need to talk about what cuts are to be made to SS/Medicare/Medicaid and the military. But no one wants to have that discussion. So we throw out meaningless issues like welfare and the forestry service. We quibble around at the extreme edges, never addressing the central problems. That's the essence of the politics being discussed. Those politics make the issue impossible to fix. I honestly don't know why it's so hard? I'd be totally willing to countenance the necessary cuts to the sacred cow programs at this point. Why is everyone so opposed to it?
- 1970-01-01 7mo agoEverything will be great until the default happens. After that, everything will still be great, we will just have less reputable friends. That's how spirals work.
- bryanlarsen 7mo agoAs long as the debt is denominated in US dollars, default is a choice. The US cannot be forced into default; it can always choose to inflate away the debt instead. Default itself will cause massive inflation, default is not a way to prevent inflation.
- dh2022 7mo agoInflation means more money chasing the same amount of goods and services. How will default cause massive inflation? Will the amount of money in circulation increase?
- bryanlarsen 7mo agoDefault makes dollars roughly worthless, so you need a lot more of them to buy anything.
- nickserv 7mo agoIt's not a problem so long as borrowing costs are low. Now if USD loses reserve status, that could be very problematic, since the US basically spreads its borrowing costs to the entire world.
- nyeah 7mo agoAgreed. And driving 95mph is not a problem as long as there aren't any tricky situations hidden a few miles down the road.
- ndsipa_pomu 7mo agoThere's seldom any problem when you're still driving at 95mph - it's slowing down (the sudden slowdowns are the worst) that's problematic
- nyeah 7mo agoGreat point. Almost by definition, as long as we're going 95mph in a straight line, we're still ok. But some alarmist passenger might get emotional anyway. (Sigh. People are people.)
- sunir 7mo agoNo, it's still a problem. The reserve currency just raises the headroom by something like 20 points by making cost of borrowing lower than it would be otherwise. There is no free lunch, just subsidized lunch.
- mrweasel 7mo agoItaly and Greece have been running at over 100% for ~30 years. It's not great, but it's also not the end of the world. It's even less bad for the US, as long as lenders still trust that the US government will pay them back. 30% of GDP would be better, but 100% isn't going to collapse the US economy on it's own.
- TheCoelacanth 7mo ago
- eunos 7mo agoand wasnt GDP boosted by the inflation from Biden era?
- HumblyTossed 7mo agoAnd wasn't inflation in the Biden era a consequence of the poor handling of the economy during Covid the previous years?
- eunos 7mo agoMy point is that the US GDP is kinda boosted by inflation and they still have over 100% debt per GDP
- Ritewut 7mo agoAnd now Trump and the GOP want to further increase debt by adding billions to ICE budget which is what this current shutdown is about.
- HumblyTossed 7mo agoAnd something like half again as much for the military.
- onemoresoop 7mo agoWar in Iran just topped 25 billion so far
- deleted 7mo ago[deleted]
- the_real_cher 7mo agoCan't we just print more money to pay off the debt? And there will be no consequences since we're the reserved currency for the world backed by the most powerful military in human history.
- ur-whale 7mo ago> Can't we just print more money to pay off the debt? Indeed > And there will be no consequences since we're the reserved currency for the world backed by the most powerful military in human history. Yup, and it works until you're not the reserve currency anymore, which ... happened before quite a few times (Dutch guilder. French franc. British pound) But hey, this will be in what ? 50 years ? Half of us will be dead by then, so who cares?
- the_real_cher 7mo agoHeck yeah! No problems here! Its future generations problem to worry about!
- cestith 7mo agoPrinting more money will speed inflation.
- the_real_cher 7mo agoApparently not due to USA status as the global reserve currency.
- danny_codes 7mo agoThat’s not how printing money works
- cestith 7mo agoThe US dollar being the reserve currency means printing more of it will add to inflation slightly slower than otherwise. It doesn’t mean we can just add trillions or quadrillions of dollars of liquidity to the economy with no added productivity and see no impact.
- iso1631 7mo agoWho is the debt owed to What will they do if it was repaid Why do people keep lending money to the US government if they think it's a problem
- derektank 7mo agoThey continue lending to the US government because they are demanding a higher rate of return. The risk premium (i.e. the problem) is priced in.
- thesuitonym 7mo agoThe debt is owed to other countries, and private bond holders. They can request their money back, refuse to purchase future bonds, and if things get really dire, potentially go to war with the US (Don't worry, this is beyond unlikely). Historically lending money to the US government has not been a problem. It's been a low earning but guaranteed return. Many of those loans have very long terms, and so even if it's a problem today, it wasn't when the loans were initiated, and it might not be when loans issued today come due. Government debt is not like personal debt, for a lot of reasons that I am not smart enough to explain.
- franktankbank 7mo ago> Don't worry, this is beyond unlikely Ch-eye-na
- bilbo0s 7mo agoChina doesn't hold that much of a percentage of our debt any longer. Somewhere around USD700B. Of the USD39T, that's obviously not that large of a lever. Pretty sure the Chinese have been implementing a policy of diversification at a minimum. (Probably a more likely explanation is they are implementing a policy of delinking and not just diversification, because the share of US Treasuries they seem to be willing to hold keeps dropping.)
- iso1631 6mo agoPretty much every country is in debt. China itself owns over $18t > Government debt is not like personal debt, for a lot of reasons that I am not smart enough to explain. One big reason is that governments print their own money. Another is they don't retire.
- ur-whale 7mo ago> U.S. Debt Tops 100% of GDP Does not matter as long as they control the printing press for the reserve currency of the world.
- resters 7mo agoGet ready for hyper-inflation. It's a good time to be a debtor!
- sph 7mo ago> It's a good time to be a debtor So you mean rich people, for whom loans are easy to get so inflation always works in their favour
- negura 7mo agoit can also mean governments. their loans also benefit from inflation that is higher than interest rates. this is how us & uk got rid of their debt after WW2. it's a way to steal money slowly from bond investors
- user20251219 7mo agoTriffin Dilemma https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma
- diogenes_atx 7mo agoAll the great Western hegemonic powers have used public debt to finance the requirements and ambitions of the state. This was true of Spain in the sixteenth century, Holland in the seventeenth century, England at the height of its power during the eighteenth and nineteenth centuries, and the USA since World War II [1]. Public debt finance is a force multiplier that enables the government to undertake far greater civilian and military projects than it could otherwise achieve. Everyone knows this, including the people who are running the U.S. Treasury and the Federal Reserve. As a percentage of GDP, government debt is high by historical standards, and it is rising at a fairly rapid pace. That could be a problem if it continues unabated. But there are two solutions: reduce spending and/or raise taxes. Most U.S. federal expenditure goes toward either defense, entitlements or interest on the debt, so it seems unlikely that spending will fall very much. That means higher taxes. At some point, the country will need to find a political reformer who can sell tax increases to the electorate. Until then, the crisis just continues to quietly grow. [1] Giovanni Arrighi (1994) The Long Twentieth Century: Money, Power and the Origins of Our Times https://www.amazon.com/Long-Twentieth-Century-Money-Origins/dp/1844673049?dib=eyJ2IjoiMSJ9.dn_Eo75zFB8qOLgKjJgUCGfixQUu96HTiU-Da8cRE7Q0-YO43UsWYOc6rbylHtTsI0ouimZkaAIN9KLp6rwktL5qi3-kBuiVJznQshKRVzxsLhHdJ5x1_PzRV-sBltb4tMtP4zCCd3k73KL71gzrpQItq-wDnWkJbAkn5kx2Bn6DZR1A_U1cSBrV3PFEFe8ceVCD5ypY0XoD46xCEGsxDVWyor6Wu4IrLilYWGCD4q0.7SA0d9uKf8QTVvOARus2EkvhqEyuMYUOxW_dyrkyzow&dib_tag=se&keywords=Long+Twentieth+Century&qid=1777557844&s=books&sbo=RZvfv%2F%2FHxDF%2BO5021pAnSA%3D%3D&sr=1-2 https://www.amazon.com/Long-Twentieth-Century-Money-Origins/...
- negura 7mo ago> But there are two solutions: reduce spending and/or raise taxes. there are other solutions, that are more convenient politically than austerity: - productivity boost - higher nominal growth through inflation - financial repression and in theory there is also the option of defaulting
- Rury 7mo ago"Austerity" is a red herring. I mean let's be serious, every option is austerity for someone... Cutting spending, means those who would have received that debt spending take a loss (perhaps their job). Raising taxes means taxpayers pay. Raising productivity or inflating the debt means the young and laborers shoulder most of the burden. Financial repression means capital owners pay. Defaulting means bond holders pay. This is what people who argue the debt doesn't matter don't understand. Sure it doesn't matter in the sense that we could always just roll the debt forward, and continue to make future generations pay. Just as it's possible to choose over and over again to wine and dine at someone else's expense, against their will. No the debt always matters, because, it's a matter over who gets to benefit and who has to pay.
- ksec 7mo agoI thought the US crossed that mark long ago. According to FED [1] it was in 2013. Could someone explain what the WSJ means given the article is behind a paywall. [1] https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S
- hashlock_p2p 7mo agoLink is not public
- hollerith 7mo agoBill Clinton gets respect from me for reducing the figure under discussion from 47.8% of GDP in 1993 to 31.4% by 2001.