U.S. Public Debt Nears WWII Levels as Deficits Worsen
America’s publicly held debt is now approaching 100% of GDP and could soon exceed the post-World War II high of 106%, according to projections reported by The Wall Street Journal.
A new chart from the Congressional Budget Office (CBO) shows that the U.S. federal deficit as a share of GDP continues to worsen. As of June 2025, the deficit stands at -6.8%, up from the -5.8% projection made in January. For context, the 2024 actual deficit came in higher than expected, intensifying concerns over the country’s long-term fiscal health.
The Road to Record Deficits
Since the early 2000s, deficits have widened due to a combination of economic crises, tax policy shifts, and rising entitlement spending. The COVID-19 pandemic triggered an especially sharp spike in government borrowing, which has yet to fully normalize. Now, with elevated interest rates and persistent spending demands, the U.S. is on track to breach its historic debt-to-GDP ratio from the mid-20th century.
The CBO’s revised forecasts in June reveal a more pessimistic outlook than its earlier estimates. While deficits were already expected to remain elevated through the 2030s, the latest trend line suggests an even steeper path ahead.
Growing Pressure on Policymakers
The expanding debt load will likely put additional pressure on future administrations to curb spending or raise revenues. Without major policy changes, the government’s interest expenses alone could crowd out funding for other priorities.
With deficits now widening faster than expected, the trajectory raises alarms about long-term sustainability and the possibility of credit downgrades. The rising debt burden could also limit fiscal flexibility in responding to future recessions or emergencies.
As the deficit climbs and borrowing costs mount, fiscal reform is likely to become a central issue in upcoming elections and budget negotiations.
Kosta Gushterov
Reporter at Coindoo
Kosta joined the team in 2021 and quickly established himself with his thirst for knowledge, incredible dedication, and analytical thinking. He not only covers a wide range of current topics, but also writes excellent reviews, PR articles, and educational materials. His articles are also quoted by other news agencies.
