Budget watchdogs warn a rising debt puts the US at risk of a debt crisis.
The nonpartisan Congressional Budget Office (CBO) recently released its long-term budget outlook and showed that budget deficits are on track to widen in the years ahead, pushing the national debt well above the size of the U.S. economy.
The CBO's budget forecasts that the debt held by the public as a percentage of gross domestic product (GDP), a metric favored by economists for comparing debt to economic output, is projected to rise from 100% this year to 156% of GDP in 2055. That would be a full 50 percentage points higher than the current record, which was set in 1946 as the U.S. began its post-World War II demobilization.
Growth in the national debt will be driven by budget deficits widening from about 6.2% of GDP in 2025 to 7.3% in 2055 – well above the 1995-2024 average of 3.9%.
Federal spending will continue to be driven by mandatory spending programs led by Social Security and Medicare amid the aging of America's population. Social Security spending is projected to rise from 5.2% of GDP this year to 6.1% in 2055, while the CBO sees Medicare spending rising from 3.1% to 5.8% of GDP in 2055.