U.S. Debt to GDP

What the ratio measures

Debt on its own says little, because a bigger economy can carry a bigger debt. Dividing the debt by GDP, the value of everything the country produces in a year, shows how heavy the load is relative to the income available to support it.

The debt here is total public debt outstanding: debt held by the public plus what the government owes its own trust funds, such as Social Security.

The 90% research

In their 2010 study and their book This Time Is Different, Carmen Reinhart and Kenneth Rogoff found that countries with public debt above about 90% of GDP tended to grow more slowly. Later research questioned how strong that effect is, but the 90% line is still one of the most cited markers in the debate.

Why it keeps rising

The ratio climbs when the government borrows faster than the economy grows. Recessions push it up sharply, as in 2008 and 2020, because tax revenue falls while spending rises. A larger debt also means larger interest payments, which add to future borrowing.

Where physical gold fits

High government debt raises questions about future inflation, interest rates and the dollar's purchasing power. Gold is not anyone's debt, which is why many savers hold some physical gold as a hedge. Our free guide explains how to hold it in a retirement account through a Gold IRA.