U.S. debt surpasses total output of U.S. economy

The U.S. national debt has exceeded the size of the U.S. gross domestic product, or GDP, according to data released by the Bureau of Economic Analysis on Thursday. The government debt held by the public was about $31.27 trillion as of March 31. Meanwhile, the U.S. nominal GDP was estimated at $31.22 trillion for the previous 12-month period that ended in March.

Because of that, the debt held by the public as a percentage of GDP sat above 100%. This percentage measures a nation's ability to repay debt, with higher ratios indicating higher default risk and lower ratios signaling better fiscal health.

How have economists responded to the numbers? Steve Hanke, a professor of applied economics at Johns Hopkins University, urged the United States to amend the Constitution to add a debt brake to cap federal borrowing.

These numbers should be an alarm bell that’s ringing especially loud to leaders in Washington, said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. Leaders need to take immediate corrective actions. She said the growing debt will continue to slow income growth, drive up interest rates, and saddle the country with massive interest costs. Additionally, it will expose the United States to challenges from what she characterized as geopolitical rivals.

What’s the highest debt-to-GDP percentage the United States has had? In 1946, following World War II, the all-time record percentage sat at 106%, MacGuineas said. She warned it was only a matter of time until the United States surpassed this.

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