Fact Check: "The U.S. national debt can exceed its gross domestic product."
What We Know
The U.S. national debt is the total amount of money that the federal government owes, which has been accumulating since the country's inception. As of fiscal year 2024, the national debt reached approximately $35.46 trillion, while the gross domestic product (GDP) was about $28.83 trillion, resulting in a debt-to-GDP ratio of 123% (Understanding the National Debt). This indicates that the national debt indeed exceeds the GDP, a situation that has occurred before; for instance, the debt-to-GDP ratio surpassed 100% in 2013 when both debt and GDP were around $16.7 trillion (Understanding the National Debt).
The Congressional Budget Office (CBO) projects that by 2035, federal debt will rise to 118% of GDP, driven by increasing mandatory spending and interest costs that outpace revenue growth (The Budget and Economic Outlook: 2025 to 2035). This trend underscores the potential for the national debt to exceed GDP in the future as well.
Analysis
The claim that the U.S. national debt can exceed its GDP is supported by historical data and projections from credible sources. The U.S. Treasury's report on national debt provides a comprehensive overview of how the national debt has evolved over time and its relationship with GDP (Understanding the National Debt). The data shows that the national debt has consistently increased, especially during periods of economic downturns or significant government spending, such as during the COVID-19 pandemic.
The CBO's projections are also reliable, as they are based on extensive economic modeling and analysis of current fiscal policies (The Budget and Economic Outlook: 2025 to 2035). The CBO is a nonpartisan agency that provides budget and economic information to Congress, making its reports a trustworthy source for understanding future fiscal trends.
However, it is important to note that while exceeding GDP can indicate potential fiscal challenges, it does not inherently mean that a country is in financial distress. Countries like Japan have maintained high debt-to-GDP ratios without facing immediate economic crises, largely due to their ability to finance debt through domestic savings and low-interest rates.
Conclusion
Verdict: True
The claim that the U.S. national debt can exceed its gross domestic product is accurate. Current data shows that the national debt has surpassed GDP, and projections indicate this trend will continue in the coming years. The evidence from both the U.S. Treasury and the CBO supports this conclusion, illustrating the ongoing relationship between national debt and economic output.