By the end of March, the U.S. national debt had reached higher than 100% of the Gross Domestic Product (GDP), according to a Committee for a Responsible Budget analysis of Bureau of Economic Analysis data. National debt is now on track to exceed levels not seen since World War II.
“With debt now above 100% of GDP, it’s only a matter of time until we pass the all-time record of 106% reached in the immediate aftermath of World War II,” said Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget. “This time the borrowing isn’t borne from a seismic global conflict, but rather a total bipartisan abdication of making hard choices.”
MacGuineas has previously warned about the impact excessive partisanship in politics has on the economy in an interview with Audacy last year.
“People tend to use their party as the signal of what they should believe… but a lot of times the parties are so busy fighting against each other as we get more polarized instead of trying to do what’s best for the country, it divides us even further,” she said.
While the BEA announced in two Thursday press releases that the real GDP (the value of goods and services produced in the U.S.) increased in the first quarter of this year and that personal income increased in March, the Committee for a Responsible Budget noted that the national debt also hit 100.2% of GDP. BEA data showed that the nominal GDP was an estimated $31.22 trillion over a 12-month period and debt held by the public came in at $31.27 trillion as of March 31.
“The contributors to the increase in real GDP in the first quarter were investment, exports, consumer spending, and government spending,” said the BEA. “Imports, which are a subtraction in the calculation of GDP, also increased.”
At 100.2% of the GDP, that national debt is now about twice the size of the historic average, according to MacGuineas. For many Americans, the connection between the nation’s debt and their personal finances might not seem clear. However, MacGuineas stresses that the link is very real.
“It’s important that people understand that this huge debt undermines our economy, undermines our ability to grow our standard of living, our wages, our jobs,” she told Audacy last May, even before the national debt reached its current size.
In a statement this week, she noted that our “prosperity and that of future generations” erodes as the debt grows. That means that things become less affordable today and that income growth slows going into the future. This pressure could then push up inflation and interest rates, making it more expensive to spend and to borrow money and putting us at risk for a financial crisis. On the global scene, it puts the nation at risk as well, MacGuineas noted.
Even without the potential impact of the debt growing larger, Gallup poll results released Tuesday showed that 55% of Americans say their financial situation is getting worse. That was up from 47% in 2024 and 53% last year, and it marked the fifth consecutive year of more Americans saying that their financial outlook is worsening rather than improving.
She said there are ways to right the ship.
“To put the country on a prosperous and sustainable path, we need to stop the bleeding,” MacGuineas argued. “That starts with rejecting any new borrowing and offsetting new spending or tax cuts,” she added.
On top of that, MacGuineas said the U.S. needs about $10 trillion of deficit reduction. She said there is “bipartisan momentum” towards bringing deficits down to 3% of GDP, a plan that could bring the debt below 100% of GDP over time.
“We’ve heard plenty of alarm bells in the past few years about our fiscal path, but this one rings especially loudly,” said MacGuineas. “The real question is whether or not our leaders in Washington will listen.”
