The ratio of US federal debt to gross domestic product (GDP) is at a historically high level. According to foreign media, the country's government debt-to-national-income ratio has reached 100 percent for the first time since World War II. The debt ratio exceeded 100 percent immediately after World War II before entering a steady upward trend following its lows in the 1970s and returning to the 100 percent threshold in the 2020s.
In the early 1940s, government debt stood at around 40 percent of GDP, but rose above 100 percent in 1945-1946 as a result of wartime spending, reaching a historic peak. In the post-war period, rapid economic growth and fiscal discipline gradually reduced the debt ratio, bringing it below 25 percent by the mid-1970s. The ratio remained around 30-40 percent until the 2008 global financial crisis, after which it accelerated due to stimulus measures.
However, the COVID-19 pandemic that began in 2020, coupled with expanded fiscal policies, pushed the debt ratio close to 100 percent. It has remained near that level and continued to rise during the first quarter of this year. The continued increase in US government debt remains a major source of pressure on global capital markets and Treasury bond yields.
Budget deficits and rising long-term borrowing costs are increasing the US government's debt-servicing expenses, contributing to volatility in global markets. Markets continue to closely monitor the sustainability of US fiscal policy and ongoing discussions over the debt ceiling. Here we are to serve you with news right now.
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