May 5, 2026 / 5:00 AM EDT / CBS News
America’s national debt has topped the country’s gross domestic product for the first time since World War II, a sharp increase in the government’s fiscal burden. Debt held by the public stood at $31.27 trillion at the end of April, edging above U.S. GDP of $31.22 trillion for the April 2025–March 2026 period, according to an analysis by the Committee for a Responsible Federal Budget (CRFB).
Outside of a brief stretch early in the COVID-19 pandemic and two years at the end of World War II, debt has not exceeded GDP, the nonpartisan CRFB found. The current surge has different drivers than WWII-era spending: recent increases reflect tax cuts, rising interest payments on existing debt, and higher costs for age-related programs such as Medicare and Social Security as the population ages, the Peter G. Peterson Foundation says.
Interest costs have climbed sharply. The U.S. is now spending more to service its debt than it spends on national defense or Medicare. Jonathan Williams, president and chief economist of the American Legislative Exchange Council (ALEC), said net interest payments on the national debt now exceed $1 trillion annually. Debt held by the public measures what the government owes to outside parties (businesses, individuals, state and local governments, foreign holders); the broader gross debt — which includes amounts the government owes to itself — is approaching $39 trillion, U.S. Treasury data show.
Whether that level of debt signals an imminent crisis or a manageable burden for a large, dynamic economy is debated. Fiscal hawks such as the CRFB warn of danger if trends continue. The nation’s debt has swollen since the 2008–09 financial crisis, when total debt hovered around $5 trillion. The core problem is a persistent gap between spending and revenue, requiring more borrowing to finance federal programs.
Looking ahead, the Congressional Budget Office (CBO) projects continued growth in federal debt: debt held by the public could reach $53 trillion by 2036, and debt held by the public could rise from roughly 101% of GDP this year to about 120% in 2036 — above the postwar high of 106% in 1946. Those projections depend on policy choices; the CRFB has proposed cutting the deficit to 3% of GDP (about half its current level) to place the debt-to-GDP ratio on a downward path while preserving fiscal flexibility.
The risks of rising debt include higher interest costs that crowd out other federal spending, greater vulnerability to financial shocks, potential credit-rating downgrades, and upward pressure on prices, which could raise everyday costs for households, the Peterson Foundation and the Yale Budget Lab warn. ALEC’s Williams argued that without bipartisan fiscal reforms, Americans could face higher taxes, slower growth, and more inflation.
Still, some signs temper immediate alarm. The U.S. economy has outpaced the average interest rate on its debt in four of the past five years, creating a positive gap that helps check the debt-to-GDP trajectory, Jacob Manoukian, U.S. head of investment strategy at JPMorgan Chase, wrote in 2025. Manoukian also sees little evidence that interest payments will soon overwhelm monetary policy or ignite runaway inflation. Demand for U.S. debt remains high: households, mutual funds and foreign investors have continued to buy newly issued Treasury debt, signaling market confidence for now.
Edited by Alain Sherter