With Washington claiming that the United States can “grow” out of its mounting fiscal burdens, some economists are sceptical that growth alone could absorb the country’s mountain of national debt, which just surpassed US$40 trillion.
The milestone, reached last week, has amplified concerns about the long-term sustainability of maintaining such a massive debt pile – one that has doubled in size from a decade ago.
Treasury Secretary Scott Bessent defended the trajectory last week, telling CNBC that much of the spending had gone towards investments in factories and equipment, and that the country would “grow our way out of” that debt level.
However, some analysts remain doubtful, pointing to elevated government spending, growing debt-servicing costs, and tax cuts as structural barriers that economic growth alone cannot overcome.
“The US has no chance of growing out of its debt problem through growth only,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis.
Despite high nominal growth rates – boosted by inflation – in recent years, the US has continued accumulating debt, adding US$10 trillion since 2022, as public expenditure remained high, she noted.