America's National Debt Is Projected to Exceed Total GDP for First Time in 70 Years

The U.S. national debt is projected to nearly exceed the country's gross domestic product (GDP) under President Donald Trump, according to the Congressional Budget Office (CBO).

In its Wednesday report, the CBO said the federal debt is expected to rise sharply this year, to 98 percent of GDP. This is significantly higher than the 79 percent of GDP at the end of 2019 and the 35 percent in 2007, before the start of the 2008-2009 Great Recession.

The CBO also projected the federal debt will exceed 100 percent in 2021, the first time this has happened in 70 years, and increase to 107 percent in 2023. The debt hasn't gone this high since 1946, when the nation accumulated large deficits during World War II.

And the CBO predicted the numbers will continue to climb. By 2030, debt will equal 109 percent of GDP, according to the report.

The high debt projections are a result of increasing deficits primarily attributed to the coronavirus pandemic, which has triggered a severe economic recession. The federal budget deficit will be $3.3 trillion in 2020, more than triple what was recorded in 2019, the CBO reported.

"At 16.0 percent of gross domestic product, the deficit in 2020 would be the largest since 1945," according to the CBO.

The CBO's predictions are based on the current state of the economy and are therefore subject to change in the future. While its findings paint a grim picture, the CBO's estimates are meant to be a tool policymakers can use to assess potential effects of future policy—not provide a forecast of future budgetary outcomes.

"Future legislative action could lead to markedly different outcomes—but even if federal laws remained unaltered for the next decade, actual budgetary outcomes would probably differ from CBO's baseline, not only because of unanticipated economic conditions, but also as a result of the many other factors that affect federal revenues and outlays," the report states.

Numbers could grow, for instance, if Congress passes a new coronavirus relief package. Lawmakers hope that the money will stimulate the economy and help decrease the national debt. But data after earlier relief legislation shows that many Americans spent their stimulus checks on necessities like rent or put the money into their savings, instead of going out to dinner or shopping.

According to the Federal Reserve, an additional $1.3 trillion has been kept in Americans' checking accounts since February, a 56 percent increase in savings.

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President Donald Trump speaks to a crowd outside the USS North Carolina on September 2 in Wilmington, North Carolina. Melissa Sue Gerrits/Getty

Trump, who touted plans to eliminate the national debt during his campaign for president in 2016, took on $19.9 trillion in debt left from the Obama administration when he assumed office in January 2017.

While presidents don't have control over how much debt they inherit, that number has swelled nearly by $7 trillion in the three years since Trump's election. The total debt reached $26.7 trillion as of September 1, according to Treasury Direct, a division of the Treasury Department.

The pandemic is certainly a large factor in this massive increase, but the data shows that the national debt was high before the coronavirus hit the U.S.—$23.2 trillion on January 31, according to Treasury Direct.

Trump told Washington Post reporters during an April 2016 interview that he would eliminate the nation's debt "over a period of eight years." He added that he would cut taxes, "renegotiate trade deals and renegotiate military deals" in his first 100 days in office.

Estimates say the Trump administration will spend $936 billion on the defense budget for the 2020 fiscal year—nearly $100 billion more than the record-breaking defense budget in 2012. And Trump and the GOP did cut taxes in December 2017, with hopes that the government would recoup its revenue losses in the long term as the cuts boosted economic growth. But evidence from some economists shows that this outcome is unlikely.

After Newsweek contacted the White House for comment, an Office of Management and Budget spokesperson said that Trump has "submitted the most fiscally responsible budgets in the universe every four years."

The spokesperson added, "Unfortunately, he has had to rebuild the military and tackle a once-in-a-century pandemic, and has had a Congress that has not enacted the savings he has proposed elsewhere."