- U.S. national debt has topped $37 trillion, drawing warnings from economists and business leaders. President Trump’s plan to repay the debt centers on tariffs, cost-cutting, and growth programs. Critics argue the impact is likely to be minimal. Meanwhile, White House deputy press secretary Kush Desai told Fortune the debt-to-GDP ratio has fallen under Trump and will keep improving with pro-growth policies and record tariff revenues.
President Trump has got plenty of ideas about how he’ll address national debt: He’ll pay it down through tariffs, or offset some of the borrowing thanks to proceeds from his “golden visa” program.
He’s also said he’ll rebalance the debt-to-GDP ratio by growing the economy, and would reduce the need for as much borrowing thanks to initiatives like the Department of Government Efficiency (DOGE).
And while no economist will expect the White House to turn around national debt overnight, they also might have hoped for some more robust policies on the issue.
This month, America’s national debt surpassed $37 trillion—a record milestone that the Committee for a Responsible Federal Budget (CRFB) had previously believed would be hit by 2030. But one pandemic later, the gargantuan spending the government undertook to steer the economy through the crisis is making its mark.
Uncle Sam is adding a trillion more dollars to the debt burden every five months, noted Michael A. Peterson, CEO of the Peter G. Peterson Foundation, an organization that works with policymakers, economists, and the public to advocate for a more sustainable fiscal outlook.
“During a time of economic growth, it is highly irresponsible to run deficits this large … At this pace, we will run through the recent $5 trillion debt limit increase—the largest in history—in just two years. We are no longer in a Great Recession or a global pandemic, but our fiscal policy keeps acting like we are,” Peterson said.
“As our debt continues to rise,” he noted, “at some point the financial markets will lose confidence in our ability to overcome the politics to solve this problem. International lenders are watching, and all three ratings agencies have now downgraded U.S. credit. The question is, How many more trillions will we add before we decide to stop? Despite today’s unfortunate milestone, it’s not too late to act. We should reform our budget before the damage is made even worse. Policymakers have many well-known options to stabilize our debt and put us on a stronger path for the next generation.”
White House deputy press secretary Kush Desai countered to Fortune: “America’s debt-to-GDP ratio has actually declined since President Trump took office—and as the administration’s pro-growth policies of tax cuts, rapid deregulation, more efficient government spending, and fair trade deals continue taking effect and America’s economic resurgence accelerates, that ratio will continue trending in the right direction.
“That’s on top of the record revenue that President Trump’s tariff policies are bringing in for the federal government.”
Peterson isn’t alone in his concern. Over the past few years, alarm bells are increasingly being rung by some of the most notable names in finance and economics. JPMorgan Chase CEO Jamie Dimon believes it is the “most predictable crisis” in history. Ray Dalio believes it will trigger an “economic heart attack,” and the usually neutral Jerome Powell says it’s past time for an “adult conversation” about the issue.
Trump’s national debt policies
Thus far, the White House’s cost-cutting and revenue-raising initiatives haven’t been without success. At the time of writing, DOGE’s savings calculator claims to have axed $202 billion from the government’s bottom line.
That figure equates to $1,254.66 in savings per taxpayer. However, given the fact that debt per capita, at the time of writing, sits at a little over $108,000 per person in America, the organization formerly headed by Tesla CEO Elon Musk still has a long way to go.
Likewise, President Trump’s tariffs have generated significant returns in the past few months. This week the CRFB reported tariff revenue into the U.S. has more than tripled from approximately $7 billion last year to approximately $25 billion in late July.
Such figures are not to be sniffed at (wherever you come down in the debate about whether American consumers or foreign counterparts will be paying the price), and revenues are expected to continue rising.
That said, $25 billion still equates to less than 0.07% of the national debt at the time of writing. If the U.S. continued to plow every penny of its current tariff revenue into national debt as it stands, it would still take nearly 120 years to pay off.
And of course, that figure and its respective interest payment is going up by the minute.
All of the above comes ahead of the issue of President Trump’s One Big Beautiful Bill Act (OBBBA), which the Congressional Budget Office estimates will add $3 trillion to the deficit between 2025 and 2034.
The White House counters that the act will rebalance the all-important debt-to-GDP ratio, which is the fundamental concern of economists. The ratio is key because it signals to foreign investors whether the growth and size of America’s economy is enough to balance its debts. If the ratio falls too out of balance, foreign buyers of American debt may fear they won’t receive their returns, or demand higher interest rates to offset the risk.
The government can take action on either side of the ratio to rebalance the books. It can either increase growth to bring down the disparity, or cut spending to reduce the debt.
The current ratio is at 121%, the St. Louis Fed reports (down from Q4 of 2024 at 122%), and the White House insists this will fall further to 94% because the OBBBA will generate economic activity. “President Trump is supersizing hardworking Americans’ paychecks and restoring fiscal sanity, helping solve our debt crisis for the long run,” the White House wrote in June.
