The national debt continues to rise

[some_al_fan]

I agree that absolute numbers are not as revealing as relative percentages but comparing the national debt, which is US Government debt, not individuals, to GDP, which is the entire economic output of the nation, is not that great either. Sure, if government spending were always at a set level of GDP then it might make sense. However, government spending as a percent of GDP has been consistently going up. A better analysis is the year over year look at government spending versus tax receipts. We have to shore that up first before we can tackle the hole we've been digging. What's past is past and there is no way to change it. We need to run surpluses. No more federal tax dollars for gender transition surgery. No more economic aid tied to progressive social causes. No more money wasted on futuristic weapons with little potential impact for good. No more tax cuts.

Just making sure—are you saying that economic aid to Argentina is perfectly fine because it is not related to progressive causes?

Regarding the rest of your post…. If government spending as a percentage of GDP is going up, then it would show up in the budget deficit.
However, it was not consistently going up, since it is another MAGA lie.
Here is the graph of government spending vs GDP:



Government spending, as % of GDP, went up only under republican presidents, as you can clearly see on the above graph. I think LBJ was the last Democratic president to increase spending as % of GDP. Sorry that numbers prove that your MAGA podcasters lie to you that spending issues are caused by evil democrats and their social issues.

 

[Tidewater]

I am arguing that absolute numbers are meaningless.
If we are running a 2% GDP budget deficit and have 3% GDP growth, we are not actually accumulating debt; we are “paying it off”. Actual values are not relevant.

Sorry, but I do not think that is right. That math only works if the government owns everything. The GDP is a measure of all everything produced by government and private industry. The deficit is only an imbalance between what the government takes in vs what it spends.
If the GDP grows at 3% and the deficit stays at 2% we are not paying off anything. We are piling up debt less quickly than the previous year.

For example, in 1925, 100 years ago, our national debt was $20.5 billion. That number is a chump change today. However, it was ~31% of GDP back in 1925.

In the previous example, you were talking about deficits (spending more in this fiscal year than is coming in). In this example, you are talking about debt

Inflation is one way to reduce debt (and that is what has happened under Carter). Another way is to increase growth.

That example only works if you have a balanced budget. Carter did not submit (or secure the passage of) balanced budgets.

 

[some_al_fan]

Sorry, but I do not think that is right. That math only works if the government owns everything. The GDP is a measure of all everything produced by government and private industry. The deficit is only an imbalance between what the government takes in vs what it spends.
If the GDP grows at 3% and the deficit stays at 2% we are not paying off anything. We are piling up debt less quickly than the previous year.

In the previous example, you were talking about deficits (spending more in this fiscal year than is coming in). In this example, you are talking about debt

That example only works if you have a balanced budget. Carter did not submit (or secure the passage of) balanced budgets.

Let’s run the numbers….
I’ve used Claude, Opus 4.1, since I am too lazy to do it by hand.
Prompt: "If the GDP is 20 trillion dollars, our debt is 25 trillion dollars, GDP growth is 3%, budget deficit is 2% of GDP, provide the next 20 years of national debt as % of GDP”

Results:
----

Based on your parameters, here's the 20-year projection of national debt as a percentage of GDP:

Key Findings
With a 3% GDP growth rate and a 2% budget deficit (as % of GDP), the debt-to-GDP ratio actually declines over time from 125% to approximately 100%. This occurs because the economy grows faster than the debt accumulation rate.

Year-by-Year Projections
Current to Year 5:

• Now: 125.0%
• Year 1: 123.4%
• Year 2: 121.8%
• Year 3: 120.2%
• Year 4: 118.7%
• Year 5: 117.3%

Years 6-10:

• Year 6: 115.8%
• Year 7: 114.5%
• Year 8: 113.1%
• Year 9: 111.8%
• Year 10: 110.6%

Years 11-15:

• Year 11: 109.4%
• Year 12: 108.2%
• Year 13: 107.0%
• Year 14: 105.9%
• Year 15: 104.8%

Years 16-20:

• Year 16: 103.8%
• Year 17: 102.7%
• Year 18: 101.8%
• Year 19: 100.8%
• Year 20: 99.9%

Key Insights

1. Debt-to-GDP drops by 25.1 percentage points over the 20-year period
2. The ratio falls below 100% by Year 20
3. GDP grows from $20 trillion to $36.12 trillion
4. Total debt grows from $25 trillion to $36.07 trillion

This projection demonstrates that when GDP growth exceeds the deficit rate, the debt burden becomes more manageable relative to the economy's size, even though the absolute debt continues to increase. However, these are simplified projections that assume constant growth and deficit rates, which rarely occur in practice due to economic cycles, policy changes, and unforeseen events.
----

 

[Tidewater]

Let’s run the numbers….
I’ve used Claude, Opus 4.1, since I am too lazy to do it by hand.
Prompt: "If the GDP is 20 trillion dollars, our debt is 25 trillion dollars, GDP growth is 3%, budget deficit is 2% of GDP, provide the next 20 years of national debt as % of GDP”

Results:
----

Based on your parameters, here's the 20-year projection of national debt as a percentage of GDP:

Key Findings
With a 3% GDP growth rate and a 2% budget deficit (as % of GDP), the debt-to-GDP ratio actually declines over time from 125% to approximately 100%. This occurs because the economy grows faster than the debt accumulation rate.

Year-by-Year Projections
Current to Year 5:

• Now: 125.0%
• Year 1: 123.4%
• Year 2: 121.8%
• Year 3: 120.2%
• Year 4: 118.7%
• Year 5: 117.3%

Years 6-10:

• Year 6: 115.8%
• Year 7: 114.5%
• Year 8: 113.1%
• Year 9: 111.8%
• Year 10: 110.6%

Years 11-15:

• Year 11: 109.4%
• Year 12: 108.2%
• Year 13: 107.0%
• Year 14: 105.9%
• Year 15: 104.8%

Years 16-20:

• Year 16: 103.8%
• Year 17: 102.7%
• Year 18: 101.8%
• Year 19: 100.8%
• Year 20: 99.9%

Key Insights

1. Debt-to-GDP drops by 25.1 percentage points over the 20-year period
2. The ratio falls below 100% by Year 20
3. GDP grows from $20 trillion to $36.12 trillion
4. Total debt grows from $25 trillion to $36.07 trillion

This projection demonstrates that when GDP growth exceeds the deficit rate, the debt burden becomes more manageable relative to the economy's size, even though the absolute debt continues to increase. However, these are simplified projections that assume constant growth and deficit rates, which rarely occur in practice due to economic cycles, policy changes, and unforeseen events.
----

Once again, you are conflating deficits and debt.

In your post above, you wrote: If we are running a 2% GDP budget deficit and have 3% GDP growth, we are not actually accumulating debt; we are “paying it off”. Actual values are not relevant." In your most recent example, you are addressing debt: "Based on your parameters, here's the 20-year projection of national debt as a percentage of GDP:"

Sure, if GDP goes up faster than debt, then the size of the debt as a percentage of GDP will decrease, but the debt will never go away, especially if adding to it every year by additional deficit spending. Then add that already-existing debt must be serviced at interest, and if the interest rate is higher than GDP growth, the debt as a percentage of GDP goes up.
If the GDP grows at 3% and the already-existing debt is serviced at 4% even with a balanced budget (i.e adding no new debt to the already existing debt, which the US are nowhere near doing), then the debt as a percentage of GDP will go up over time. But the US is both servicing existing debt, and adding new debt every year to the already-existing debt. Bottom line, the US is in deep, deep trouble and politicians of both parties fiddle while Rome burns to their eternal shame. And we keep re-electing them to our eternal shame. Future generations will curse today's politicians and today's voters.

 

[some_al_fan]

If the GDP grows at 3% and the already-existing debt is serviced at 4% even with a balanced budget (i.e adding no new debt to the already existing debt, which the US are nowhere near doing), then the debt as a percentage of GDP will go up over time. But the US is both servicing existing debt, and adding new debt every year to the already-existing debt. Bottom line, the US is in deep, deep trouble and politicians of both parties fiddle while Rome burns to their eternal shame. And we keep re-electing them to our eternal shame. Future generations will curse today's politicians and today's voters.

Servicing existing debt counts as a budget expense. Thus, when we are saying “2% budget deficit”, that number already includes servicing the existing debt. Interest on the US National Debt is actually the N3 biggest spend category right now (behind SS and Medicare).
Thus, if the GDP growth is 3% and the budget deficit is 2%, then we will be reducing our debt burden over time according to the numbers that I’ve posted above.
In other words:
- if "GDP growth > Budget deficit” then we are decreasing the debt burden
- If GDP growth < Budget deficit” then we are increasing the debt burden

 

[Bamaro]

I dont care what numbers are cherry picked by anyone but a debt of 37T, that will only speed up as a result of the One Big Ugly Bill, will be our downfall.

 

[JDCrimson]

Even if we adopted a plan to service the debt, I dont think other nations would let us do it. Simply originate another war or inter-country disturbance within our sphere of influence and you are back to deficit spending. Engineer another pandemic and get the same result.

I think its foolish to think we can pay our national debt off. What should be done is manage the growth of the debt within the desired inflation.

Debt ≠ deficit, if that what you are arguing.
Deficits contribute to debt, but the debt is the accumulated deficits (minus surpluses which are scarce as hen's teeth) over the past. We need to run a budget surplus of $370 billion for 100 years to pay this debt off. Figure the odds of the scum in Congress agreeing not to spend if they inherited a $370 billion surplus.
We could run a Weimar Germany kind of inflation for a couple of decades and inflate this away, but they might bring about some unfortunate developments (like it did in Germany). Might not be fun.

 

[Tidewater]

Even if we adopted a plan to service the debt, I dont think other nations would let us do it. Simply originate another war or inter-country disturbance within our sphere of influence and you are back to deficit spending. Engineer another pandemic and get the same result.

I think its foolish to think we can pay our national debt off. What should be done is manage the growth of the debt within the desired inflation.

We absolutely must service the debt (which means pay interest on debt already incurred). Paying the interest is a constitutional requirement.

We also must pay the principal some day, or the lenders one day are going to come to the conclusion that we have so much debt, we are never going to pay it back and you will see the price they charge to lend (i.e. the interest rate) go up.* When that happens, we will spend even more servicing the existing debt and interest payments will become an ever-larger portion if the federal budget. (Right now, out of a federal budget of $6.8 trillion, we spend $752B on interest.


* If you had $200,000 to lend. A borrower making $100,000/year, who spends $75,000/year, and has excellent credit wants to borrow $200,000 for a house, how much interest would you charge? Now, imagine a borrower with an income of $98,000/year, who spends $136,000/year on vacations and hot tubs and they have declared bankruptcy recently, how much interest would it take to get you to lend to the latter? The difference between the two is you interest premium.

 

[Tidewater]

Servicing existing debt counts as a budget expense. Thus, when we are saying “2% budget deficit”, that number already includes servicing the existing debt. Interest on the US National Debt is actually the N3 biggest spend category right now (behind SS and Medicare).
Thus, if the GDP growth is 3% and the budget deficit is 2%, then we will be reducing our debt burden over time according to the numbers that I’ve posted above.
In other words:
- if "GDP growth > Budget deficit” then we are decreasing the debt burden
- If GDP growth < Budget deficit” then we are increasing the debt burden

On a percentage basis yes.
That debt does not go away.
And in FY 24 the federal government spent $1.9 trillion more then it took in. Given those facts, we would need unbelievable growth for decades to get that down to something reasonable.

 

[some_al_fan]

On a percentage basis yes.
That debt does not go away.
And in FY 24 the federal government spent $1.9 trillion more then it took in. Given those facts, we would need unbelievable growth for decades to get that down to something reasonable.

It needs to be a mix of targeted reduced spending, higher (but not high enough to affect growth) taxes and higher growth.

The interesting tidbit is that illegal immigration helps with growth, since immigrant workers contribute to GDP. Not saying that we should support illegal immigration, but we should have a sensible temporary working visa program.

 

[some_al_fan]

* If you had $200,000 to lend. A borrower making $100,000/year, who spends $75,000/year, and has excellent credit wants to borrow $200,000 for a house, how much interest would you charge? Now, imagine a borrower with an income of $98,000/year, who spends $136,000/year on vacations and hot tubs and they have declared bankruptcy recently, how much interest would it take to get you to lend to the latter? The difference between the two is you interest premium.

That example is not fully applicable to the US debt. Household debt is not the same as governmnet debt

The Federal Government Has Borrowed Trillions. Who Owns All that Debt?

Most federal debt is owed to domestic holders, but foreign ownership is much higher now than it was about 50 years ago.

www.pgpf.org

As you can see, FRS holds a large share of US debt. What does FRS do with the interest that it receives?
Once it covers expenses, FRS remits the rest back to the US Treasury. While FRS has been unprofitable last several years due to paying off COVID assets, it has become profitable again this year; thus, this year it will resume re-paying interests back to the US Treasury

The Fed’s Remittances to the Treasury: Explaining the 'Deferred Asset'

The Federal Reserve typically generates excess earnings, which it remits to the U.S. Treasury. But what happens when the Fed’s costs exceed its income? A blog post explains.

www.stlouisfed.org

https://www.piie.com/research/piie-charts/2025/fed-projected-turn-profitable-again-after-three-years-losses

 

[Tidewater]

That example is not fully applicable to the US debt. Household debt is not the same as governmnet debt

True, but I was just illustrating the idea of a risk premium. The riskier the investment, the higher the interest the lender will require before he lends. The example rather under-illustrated the problem. The data is from FY 24 budget (in $ trillions) x 20,000 to make them comprehensible in a household example. I did not include the already-existing debt.
So, in the latter case, the borrower earns $98,000, but is spending $136,000 a year and putting the $38,000 on his credit card every year and already has $740,000 in debt ($37 trillion x 20,000). Plus, this borrow has a magic "sovereignty" button he could press and discharge all his debts. He would just push the sovereignty button and says, "Yeah, that $740,000? I ain't paying that, interest or principal. The paper you have saying I owe you is officially worthless."
If you had some money to invest, would you lend that borrower money?

Right now, people are doing it because the borrower (the US government) has never pushed the "sovereignty button" and the world has some serious risks with Russia and China, Europe experiencing some upheavals due to its own debt plus uncontrolled immigration. The US, despite all its liabilities, still seems the safest place to park money, but that will not always be true.

 

[some_al_fan]

True, but I was just illustrating the idea of a risk premium. The riskier the investment, the higher the interest the lender will require before he lends. The example rather under-illustrated the problem. The data is from FY 24 budget (in $ trillions) x 20,000 to make them comprehensible in a household example. I did not include the already-existing debt.
So, in the latter case, the borrower earns $98,000, but is spending $136,000 a year and putting the $38,000 on his credit card every year and already has $740,000 in debt ($37 trillion x 20,000). Plus, this borrow has a magic "sovereignty" button he could press and discharge all his debts. He would just push the sovereignty button and says, "Yeah, that $740,000? I ain't paying that, interest or principal. The paper you have saying I owe you is officially worthless."
If you had some money to invest, would you lend that borrower money?

Right now, people are doing it because the borrower (the US government) has never pushed the "sovereignty button" and the world has some serious risks with Russia and China, Europe experiencing some upheavals due to its own debt plus uncontrolled immigration. The US, despite all its liabilities, still seems the safest place to park money, but that will not always be true.

It is slightly different from the US government. When a person or corporation needs money, their interest depends on the lender's willingness to provide it.
However, in the US, FRS is a lender of last resort. If there is a Treasury auction tomorrow and nobody buys US bonds (US debt), then the FRS will step in and buy them.
What does it mean? It means that FRS controls interest on US bonds. It can do so via setting short-term borrowing rates and other instruments.
However, it is not a free lunch. If FRS indeed buys all US bonds, it could lead to inflation like we’ve seen during COVID. Thus, the concern with growing debt is not higher interest, but higher inflation.
Of course, to combat inflation, the FRS could artificially raise interest rates, as it did in the early 1980s.

 

[Tidewater]

It is slightly different from the US government. When a person or corporation needs money, their interest depends on the lender's willingness to provide it.
However, in the US, FRS is a lender of last resort. If there is a Treasury auction tomorrow and nobody buys US bonds (US debt), then the FRS will step in and buy them.
What does it mean? It means that FRS controls interest on US bonds. It can do so via setting short-term borrowing rates and other instruments.
However, it is not a free lunch. If FRS indeed buys all US bonds, it could lead to inflation like we’ve seen during COVID. Thus, the concern with growing debt is not higher interest, but higher inflation.
Of course, to combat inflation, the FRS could artificially raise interest rates, as it did in the early 1980s.

Good point, but to address &37,000,000,000,000 in debt, the fed will have difficulty balancing interest rates and inflation. At such an enormous scale, things become difficult.

 

[Bamaro]

Congress and the president love to spend money that we dont have. Thats why its 37T with no end in site

 

[Bamaro]

Incase anyone wonders what 37T looks like, according to ChatGPT, if you had a 20x20 foot room, filled tightly with bands of $100 bills, it would be 36,887 feet high. That's taller than Mt Everest and higher than a normal jetliner.
If you spend $1000 per second it would take you 1,173 years to send 37T

 

[mdb-tpet]

As long as we keep passing tax cuts for the wealthy (and raising taxes/cutting benefits for the bottom earners), the national debt simply doesn't matter, right?

https://www.cbpp.org/research/federal-tax/by-the-numbers-house-republican-tax-agenda-favors-the-wealthy-and-leaves

 

[bamacpa]

No, you can't. I think he's in the process of trying to form a senior officer corps which would support martial law. Whether that can be done is anyone's guess...

I also think that's where we are headed. We see it already with false emergencies being declared to acclimate us to troops in our streets.

 

[some_al_fan]

US GDP Growth projections by Deloitte:

United States Economic Forecast Q3 2025

The future path of the US economy hinges largely on how tariffs and immigration play out, with each shaping growth, prices, and investment in different ways

www.deloitte.com

It is clear to see from their calculations how deportations and tariffs slowing down GDP growth; thus, increasing our debt burden

 

[crimsonaudio]

For the first time ever, the U.S. is spending more on interest payments ($1.16T) than on national defense ($1.13T). The cost of past debt now exceeds the cost of protecting the nation. The bill for decades of borrowing has come due.

https://twitter.com/i/web/status/1978443489655545991