Picture this: by the time you finish reading this sentence, the United States national debt has grown by hundreds of thousands of dollars, continuing its relentless climb from $31.4 trillion at the start of 2023 to a staggering $35.5 trillion by September 2024.
Key Takeaways
- As of September 30, 2024, the total gross federal debt stood at $35.5 trillion
- On January 1, 2023, U.S. national debt was $31.4 trillion
- The U.S. debt surpassed $34 trillion on January 4, 2024
- Debt-to-GDP was 133% as of Q2 2024
- In 2023, federal debt held by public was 98% of GDP
- Debt-to-GDP hit 106% in 2020 due to pandemic
- Japan holds 22.9% of US public debt as of April 2024
- China holds 2.6% or $772.7B of US debt in Jan 2024
- UK holds 5.9% of foreign-held US debt ($740B) in 2023
- Net interest payments on debt were $659 billion in FY 2023
- Interest costs projected to reach $1.2T by 2033
- FY 2024 interest payments hit $892B (record)
- Federal debt projected to rise to 166% of GDP by 2054
- Annual deficits average $2T through 2034
- Debt held by public to 116% GDP by 2034
The United States national debt has grown rapidly and now poses a significant fiscal challenge.
Current and Historical Total Debt Levels
- As of September 30, 2024, the total gross federal debt stood at $35.5 trillion
- On January 1, 2023, U.S. national debt was $31.4 trillion
- The U.S. debt surpassed $34 trillion on January 4, 2024
- Total public debt outstanding reached $33.17 trillion as of October 31, 2023
- In fiscal year 2022, federal debt held by the public increased by $7.1 trillion
- U.S. debt hit $30 trillion on February 19, 2022
- At the end of WWII in 1946, debt was $269 billion
- Debt reached $1 trillion in 1981
- By end of FY 2008, debt was $10 trillion
- Debt doubled from $14.2 trillion in 2011 to $28.4 trillion in 2021
- As of August 2024, intragovernmental holdings were $7.0 trillion
- Publicly held debt was $27.3 trillion in June 2023
- Debt increased by $2.3 trillion in FY 2021 alone
- From 2001 to 2021, debt rose from $5.8T to $28.4T
- Peak debt during COVID was $28.1T in March 2021
- As of Sep 30, 2024, total debt $35.6T
- Debt crossed $32T on June 2, 2023
- End FY2020 debt $27.7T post-CARES Act
- Debt was $5.7T in 2000
- FY2019 debt increase $584B
- Public debt $26.3T end 2022
Current and Historical Total Debt Levels Interpretation
The United States has mastered the art of turning fiscal milestones into a treadmill, sprinting from its first trillion-dollar debt in 1981 to a staggering $35.6 trillion today with the alarming grace of someone who just keeps adding zeroes to a tab their grandchildren will inherit.
Debt Holders and Composition
- Japan holds 22.9% of US public debt as of April 2024
- China holds 2.6% or $772.7B of US debt in Jan 2024
- UK holds 5.9% of foreign-held US debt ($740B) in 2023
- Foreign investors hold $8.0 trillion of US public debt as of Dec 2023
- Federal Reserve holds 13% of marketable Treasury securities
- Intragovernmental debt: Social Security Trust Fund holds $2.8T
- Mutual funds hold $5.2T in Treasuries as of 2023
- State/local govts hold $1.2T in US debt
- Pension funds hold 8% of US Treasuries
- Individuals hold $1.6T directly in savings bonds/Treasuries
- Belgium holds $353B (surprising large holder)
- Ireland holds $310B in US Treasuries
- Cayman Islands holds $350B (offshore)
- Domestic holders: 70% of total public debt
- Banks hold 15% of US marketable debt
- Foreign share of public debt peaked at 34% in 2015
- Military retirement funds hold $1.5T intragovernmental
- Foreign holdings $8.1T as Feb 2024
- Fed's Treasury holdings $4.9T as of 2024
- Social Security $2.83T holdings Sep 2023
- Luxembourg holds $377B (custodial)
- Canada holds $378B US debt
- Taiwan $250B holder
- Insurance companies hold $0.6T Treasuries
- Foreign central banks 50% of foreign-held debt
- US households hold 5% of debt
- Brazil holds $230B
- Switzerland $290B
- Domestic non-Fed: 50% public debt
Debt Holders and Composition Interpretation
Our national debt is a house of mirrors where the biggest reflection staring back at us, holding over 20% of the foreign-held total, is a surprisingly familiar face: ourselves, via our own Social Security Trust Fund and the Federal Reserve.
Debt-to-GDP Ratios
- Debt-to-GDP was 133% as of Q2 2024
- In 2023, federal debt held by public was 98% of GDP
- Debt-to-GDP hit 106% in 2020 due to pandemic
- Historical high debt-to-GDP was 106% in 1946
- Current debt-to-GDP projected at 122% by 2034
- In Q4 2023, ratio was 122.3%
- Debt-to-GDP was 79% in 2019 pre-pandemic
- Under Reagan, rose from 32% to 53% (1981-1989)
- Obama era: 62% to 104% (2009-2017)
- Trump administration: 104% to 129% peak in 2020
- Biden FY2023: debt-to-GDP averaged 97%
- Federal debt per GDP projected 180% by 2053
- In 1980, debt-to-GDP was 32.6%
- Q1 2024 debt-to-GDP at 123%
- Japan has higher 252% debt-to-GDP vs US 122% in 2023
- Debt per person $106,000 in 2023
- Debt-to-GDP 100% first hit in 2013
- Q3 2023 ratio 120.8%
- Post-WWII decline to 31% by 1981
- Bush era: 55% to 84% (2001-2009)
- Debt-to-GDP forecast 144% by 2042
- 1970 ratio 35%
- Luxembourg has low 25% vs US 122%
- Debt-to-GDP rose 20 pts in 2020 alone
- Italy 140% debt-to-GDP in 2023
Debt-to-GDP Ratios Interpretation
We’re essentially refinancing the entire country, every few years, to keep afloat, like a desperate homeowner who’s stopped asking for the interest rate and just keeps adding new rooms without a roof.
Interest Payments and Costs
- Net interest payments on debt were $659 billion in FY 2023
- Interest costs projected to reach $1.2T by 2033
- FY 2024 interest payments hit $892B (record)
- Interest as % of budget: 14% in 2024
- Average interest rate on marketable debt: 3.3% in 2024
- 10-year Treasury yield averaged 4.2% in 2023
- Interest expense grew 30% from $476B in FY2022 to $619B est FY2023
- By 2025, interest costs exceed defense spending ($1T vs $0.9T)
- Short-term debt rollover risk: $7T maturing in 2024 at higher rates
- Interest payments = 2.5% of GDP in 2023
- Historical low rates: 1.6% avg in 2021
- Medicare HI Trust Fund interest: $5B annually
- Total interest outlays $870B projected FY2024
- Rates on 30-year bonds hit 5% in Oct 2023
- Debt service costs up 148% since 2020
- CBO projects interest at 3.7% of GDP by 2034
- FY2023 net interest $659B, 10% budget share
- Projected $1.7T interest by 2034
- Avg rate 2.5% in FY2023
- 2-year yield 5.25% Oct 2023 peak
- Interest doubled since 2021 low
- GAO: interest biggest spending driver
- 3-month T-bill avg 5.3% 2024
- Interest-to-revenue ratio 18% in 2024
- Refinancing $28T at higher rates adds $400B/year
- Historical avg rate 4.4% since 1970s
- Fed remittances down $114B in 2023 due to rates
- Interest exceeds Medicaid spending 2025
Interest Payments and Costs Interpretation
We've borrowed so much on such a short leash that our national hobby is now just paying the vig, and the vig is about to eat the entire defense budget for a light snack.
Projections and Future Outlook
- Federal debt projected to rise to 166% of GDP by 2054
- Annual deficits average $2T through 2034
- Debt held by public to 116% GDP by 2034
- Interest costs to hit 6.3% of GDP by 2053
- Under current law, debt 195% GDP by 2053
- IMF forecasts US debt-to-GDP 140% by 2029
- GAO: unsustainable path, debt 200% GDP in 2047
- If policies unchanged, $50T debt by 2033
- Social Security shortfall adds $20T to debt by 2034
- Medicare unfunded: $48T over 75 years
- CBO baseline: $20T cumulative deficits 2024-2033
- Aging population drives 50% debt increase by 2050
- No action: debt service crowds out 25% spending by 2030s
- Optimistic scenario: debt stabilizes at 130% GDP
- Debt 172% GDP by 2054 baseline
- Cumulative deficits $22T 2025-2034
- Alternative scenario: 219% GDP by 2053
- Entitlements drive 80% deficit growth
- Penn Wharton: sustainable debt 175-200% GDP
- World Bank projects US debt 150% by 2030
- CRFB: $112T debt by 2053 no changes
- Aging boomers add $10T to deficits
- CBO: revenues 18.5% GDP, spending 24% by 2053
- Health costs 10% GDP by 2053 vs 5% now
Projections and Future Outlook Interpretation
The numbers are screaming that our national debt is morphing from a troubling burden into a generational tyrant, set to commandeer a quarter of our spending just on interest while the combined weight of an aging population and soaring health costs drags the promise of the future deeper into a fiscal hole we are still actively digging.
Sources & References
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