Explanation of Current Debt/GBT Ratio

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After World War II, the U.S. had a very high debt-to-GDP ratio (how much the government owes compared to what the country produces in a year). Over time, that number went down because the economy grew and the government borrowed less.

But today, after 43 years of trickle down, the ratio is one of the highest since that time—around 121–124% (Trading Economics, CEIC Data).

This is a problem because:

• Higher debt means higher interest payments. Just like if you borrow money and have to pay interest, the U.S. must also pay interest to people and countries it owes money to (U.S. Treasury).
• Less money for important things. If the government spends more on interest, it has less to spend on schools, roads, and health care (Congressional Budget Office).
• More pressure on future generations. If the debt keeps growing, today’s kids will inherit the bill and have to deal with higher taxes or fewer services (Committee for a Responsible Federal Budget).

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