by Michael Pento
Kitco
The US debt-to-GDP ratio is currently at 123% and is projected to reach 140% by 2029. Annual deficits now equal 6.4% of GDP, and the Congressional Budget Office forecasts that the deficit will rise to 9% of GDP, or $2.7 trillion, by 2035. The interest payments on US debt alone account for approximately 3% of the country’s GDP. Even if the primary deficit were eliminated, the debt-to-GDP ratio would not fall unless the underlying economic growth exceeded 3%. However, this is highly unlikely, as both the labor force and productivity are shrinking, with productivity down 1.5% in the first quarter. Achieving consistent 3% growth is therefore impossible.
This year alone, the deficit will add an amount equivalent to 40% of all federal revenue to the national debt. For fiscal year 2025, the deficit already stands at $1.36 trillion, with four months remaining in the year. This figure is 14% higher than last year, and debt financing is expected to run above $1.2 trillion for the fiscal year, totaling $776 billion over the first eight months. Our debt now equals 740% of federal revenue. By 2035, the national debt is expected to reach $67 trillion. It took the United States 250 years to accumulate the first $37 trillion of national debt, and we are now on track to add another $30 trillion in the coming decade.