US federal debt heads towards more than 100% of GDP

Janet Yellen urges Congress to work together on US debt. (Image: Bloomberg)

Thu, 04 Apr 2024

(Bloomberg) - The Congressional Budget Office warned in its latest projections that US federal government debt is on a path from 97% of GDP last year to 116% by 2034 – higher even than in World War II. The actual outlook is likely worse.From tax revenue to defence spending and interest rates, CBO forecasts released this year are underpinned by rosy assumptions. Plug in the market’s current view on interest rates, and the debt-to-GDP ratio rises to 123% in 2034. Then assume – as most in Washington do – that ex-Presid...

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