What is the debt to GDP ratio?

The debt to GDP ratio compares the total U.S. national debt with the size of the economy. A ratio of 100% means the federal government owes as much as the entire country produces in a year. This tool uses the Treasury’s daily Debt to the Penny figure and the latest GDP from the Bureau of Economic Analysis.

How we calculate it

We divide total public debt outstanding, which includes debt held by the public and debt owed to government trust funds, by the latest quarterly GDP stated at an annual rate. The history chart uses the official quarterly series for the same measure, back to 1966. The live debt clock adds the past year’s average pace of borrowing to the latest official figure.

Why 90% matters

Economists Carmen Reinhart and Kenneth Rogoff found that countries with public debt above about 90% of GDP tended to grow more slowly. Later research debated the size of the effect, but the 90% level is still widely cited. U.S. debt passed 100% of GDP in 2012.

What it means for your savings

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

This tool is for educational purposes only and is not investment advice. Past performance does not guarantee future results.