Federal Debt Appears to be Stabilizing

These kinds of posts always seem to upset some people so I’ll add a number of qualifiers.

The latest data suggests that U.S. federal debt appears to be stabilizing. By U.S. debt, I mean federal government debt held by the public as a percent of GDP.

The figure for Q3 was 72.8% of GDP which is down from 74.0% for Q1. It’s also 0.6% above the number for Q1 of 2013.

The measure of debt basically doubled in five years, so some leveling off is good to see. According to the projections by the CBO, debt held by the public should stabilize around 70% to 75% of GDP. So far, the data suggests that this forecast is largely accurate.

The problem is that it won’t last long. Within 10 years, the debt is projected to grow again. CBO projections aren’t always accurate but that’s because we’re able to take actions now to prevent good or bad news in the future.

I want to see more data before I’m ready to say this with more certainty, but it appears that our debt is no longer growing.

Posted by on December 1st, 2014 at 10:41 am


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