When the House and Senate return to Washington after Labor Day they will be in a mad scramble to boost the debt ceiling, but look for some to balk for this reason: The U.S. debt is already higher than the country’s gross domestic product.
According to government figures, debt is $19.8 trillion and the GDP is $19.2 trillion. In other words, debt is 103 percent of GDP.
According to the latest Pew Research Center analysis, “The nation’s debt is now bigger than its gross domestic product, which was an estimated $19.23 trillion in the second quarter. Debt as a share of GDP rose steeply during and after the 2008 financial crisis. Since 2013 it has equaled or exceeded GDP, which had not been seen since the end of World War II.”
The interest on that debt is sky high: $276 billion this fiscal year. That’s 6.8 percent of all federal outlays.
But, said Pew, that’s a good deal because interest rates are low, just 2.2 percent.
And China doesn’t hold a lot of U.S. debt. Said Pew, “mainland China only held about 5.8 percent of the total debt, or about $1.15 trillion. Hong Kong, a ‘special administrative region’ of China, held another $202.6 billion. China was the top foreign holder of Treasury securities, ahead of Japan, which held just under $1.1 trillion.”
Paul Bedard, the Washington Examiner’s “Washington Secrets” columnist, can be contacted at [email protected]
