America's national debt is now larger than the entire economy

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The US national debt passed another grim milestone Thursday when the latest data showed that government debt held by the public — the most conservative way to measure what is owed — has surpassed America’s total annual economic output.

As of Tuesday, government debt held by the public is about $31.27 trillion, according to the US Treasury. Meanwhile, the US nominal gross domestic product (GDP) from April 1, 2025, to March 31, 2026, was an estimated $31.22 trillion, according to new Commerce Department data released Thursday.

That imbalance is expected to worsen in the years ahead, with the US firmly on track to break the all-time record of a 106% debt-to-GDP ratio set in 1946 after World War II.

Already in this fiscal year, which began last October, the US has spent $1.17 trillion more than it has collected, according to the federal government, with the annual deficit projected to grow to nearly $2 trillion in the coming months.

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A main driver of the surging debt, the CBO noted, is increased spending on programs like Social Security and Medicare as the population ages, not to mention interest payments on the debt itself.

Interest on the national debt has grown sharply, exceeding defense spending in fiscal year 2024.

Interest on the debt currently makes up 14% of US government spending. Put another way, over 1 in 7 dollars spent by the federal government is to service the debt.

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