Can We Really ‘Grow Our Way Out Of’ $40 Trillion in National Debt? Why One Economist Says ‘The US Has No Chance.’

When the national debt surpassed $40 trillion recently, it captured mainstream media's attention and coincided with Treasury Secretary Scott Bessent's bond market interventions being viewed as unsuccessful. Bessent downplayed the debt issue, stating that the government could focus on growth to address it. Vice President JD Vance echoed this sentiment, claiming there is a plan to boost economic growth faster than debt, but many economists remain skeptical.

Economists argue that without structural reforms to expenditures and revenues, growth alone cannot tackle the $40 trillion debt. In fact, a significant average annual real GDP growth rate of 4.31% would be needed over the next decade to eliminate the deficit through growth alone – much higher than the projected 1.8% from the Congressional Budget Office.

Critics point out that healthcare spending and Social Security benefits could counteract economic growth, making growth alone insufficient. Interest payments on the debt have already reached $1 trillion annually and now exceed the defense budget, creating a self-reinforcing crisis if bond markets do not see improvement.