Liabilities held by the public could exceed the country’s annual output as early as next year, according to the Congressional Budget Office

US debt held by the public is expected to hit an all-time high within the next ten years, the Congressional Budget Office (CBO) warned in its latest Budget and Economic Outlook, released on Wednesday.

According to the CBO, federal public debt amounted to $26.2 trillion at the end of the 2023 fiscal year, accounting for 97% of GDP. That figure is expected to reach 99% this year and exceed the country’s annual economic output in 2025 at 101.7% of GDP.

By 2028, public debt is on pace to exceed the World War II record high of 106% of GDP, reaching $48.3 trillion by 2034, an unprecedented 116% of economic output and nearly two and a half times its average over the past 50 years.

According to the CBO, the surge in public debt is the direct result of burgeoning budget deficits. The federal budget deficit in 2024 is projected to rise to $1.5 trillion, or 5.3% of GDP, and climb further over the next decade. The cumulative deficit is projected to total $20.0 trillion over the period of 2025-2034, and continue to grow, pushing debt levels to a staggering 172% of GDP by 2054.

Debt held by the public is the largest part of the total US national debt, which also includes intragovernmental debt. Debt held by the public consists mostly of securities that the Treasury issues to fund the federal government’s operations and to pay off its maturing liabilities.

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Total US national debt topped $34 trillion for the first time in history in late December of last year. It currently amounts to $34.2 trillion, or about $101,800 per US citizen. Last month, US Treasury Secretary Janet Yellen said that the level of US debt looks like “a scary number” and urged the government to take steps “to make sure that our deficits come down.”

Jamie Dimon, head of JPMorgan, the nation’s largest bank, also recently warned that the US economy is on its way towards a major crisis unless Washington gets the debt pileup under control.

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