US debt now tops GDP as interest costs surge | The Excerpt

On the Tuesday, May 19, 2026, episode of The Excerpt podcast: America’s debt has grown larger than the entire economy, and the cost of carrying that debt is rising as interest payments increase. That growing burden is putting new pressure on federal finances and raising concerns about long-term sustainability. Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, joins USA TODAY’s The Excerpt to explain how serious the risks are and what it could mean for future generations.

Hit play on the player below to hear the podcast and follow along with the transcript beneath it. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.

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Dana Taylor:

America's debt has crossed a striking threshold. It's now bigger than the economy itself. Questions about what that means start to take shape when interest enters the picture. As the cost of carrying debt grows, its impact becomes harder to ignore. So what should we do about the national debt, and just how worried should we really be? Hello and welcome to USA TODAY's The Excerpt. I'm Dana Taylor. Today is Tuesday, May 19th, 2026. Joining me to talk about the impact of the scale of US borrowing and what it likely means for future generations is Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget. It's so good to speak with you, Marc.

Marc Goldwein:

Yeah, thank you for having me.

Dana Taylor:

Marc, for decades, the national debt was treated as a major political and economic threat. Today the numbers are dramatically larger, but it feels as if the political and public urgency has waned. Is this an instance of politicians just wanting to, again, kick the can down the road rather than do the hard work of figuring out how to fix it?

Marc Goldwein:

This is a great question. So I think a few things are going on. First of all, as you mentioned, the debt is massive, but over the last 15 years, we saw debt run up pretty significantly after the global financial crisis and didn't see the immediate consequences in terms of higher interest rates, inflation, things like that. So I think politicians, they got a little bit cocky, for lack of a better word, that it couldn't hurt them. Now, since then we saw the great inflation in 2021, 2022. A lot of that was deficit driven, and now we're seeing interest rates at new highs. A lot of that is debt driven. And so politicians should in fact be really worried about this, but I think they a little bit learned the wrong lessons of the 2010s. That's a bit of it. The other bit of this is exactly what you say.

Deficit reduction is hard. It requires telling somebody they either need to pay more in taxes, receive less in government services or have lower benefits. Those are not popular positions. It's a lot easier to put your head in the sand, get through the next election and make the next generation somebody else's problem.

Dana Taylor:

When economists worry about us carrying debt larger than the economy, what are they actually worried about?

Marc Goldwein:

There's no magic that happens when your debt goes from 99% of GDP to 101% of GDP. But what this is symbolic of is a debt that's running away from us. Countries, especially rich countries, can borrow. It's often healthy to borrow, in fact, to fight recessions, to spread out the cost of emergencies over time, to make investments. The challenge is when your borrowing is rising faster than your capacity to hold it. And that's what debt to GDP basically measures. It measures how big is our debt relative to our capacity to hold it. And what we're seeing is that debt is starting to run away from us. As debt passes 100% of GDP threshold, we enter increased risk of a debt spiral. Debt spiral happens when high debt pushes up interest costs, interest costs push up debt, and the cycle continues, and eventually debt rises at a rapid pace.

Even before that spiral, debt can have all sorts of negative economic consequences, which I'm happy to discuss, but everything from higher inflation to higher interest rates to lower wage growth. But when we hit that spiral, that's when debt goes from being a problem to being an emergency.

Dana Taylor:

Marc, what I'm wondering, is there a point or are we already past it where the national deficit starts affecting ordinary life here in America?

Marc Goldwein:

We are already at the point that the debt is affecting your life. If you go back to 2021, 2022, 2023, and even today, in fact, when we had that high inflation, that was partially driven by the very high deficits that we had. If you look at the 6.5%, 7% mortgage rate that you might be getting on your new home, that's driven in part by the high debt that we have. And this one's harder to explain, but if you look at your wages, they're a little bit lower than they would have been had we gotten the debt under control. And so Americans are already feeling the debt. In addition, the debt is constraining for the federal government. The reason is that when we borrow, we pay interest on it. And last year we spent $1 trillion on interest. We spent more on interest than we spent on the Department of Defense.

We spent almost twice as much on interest as we spent on children. And so that interest is crowding out our ability to make other investments, to defend the country, to provide tax relief. Name your priority. We can't do it if we're using the money to service the debt.

Dana Taylor:

Sticking with that, the US has borrowed at a scale most countries couldn't sustain. Now that we're looking at debt that's higher than GDP and rising, is carrying this much debt still sustainable for us?

Marc Goldwein:

The United States is a very rich country with very strong institutions and significant international power. So we can carry debt of 100% of GDP. Is it advisable? Maybe not, but we can do it. We're doing it right now. The question is, can that debt continue to rise and how high? At some point, markets are going to look at our situation and see we have no path to correct things, and that's when the panic can ensue. And so no, the debt is not on a sustainable trajectory. We can hold our current debt, but we are in an unsustainable path. And if we continue on this path, eventually the only possible outcome will be some form of fiscal crisis.

Dana Taylor:

Marc, is there an argument to be made that being able to borrow the way we have has put the US at an advantage?

Marc Goldwein:

Look, just as if you run up your credit card bill, you can live a much more lavish lifestyle. So too, has the US been able to live a more lavish lifestyle with this borrowering. And so the boomer generation, in fact, all of us have enjoyed lower taxes. We've enjoyed more government services, higher benefits and things like social security. And so in the near term, it can feel pretty good, but those near term benefits come with a significant long-term cost, which is that slowly but surely the debt is eating at our wage growth. Slowly but surely it is increasing our interest payments, and eventually there will be correction. And that correction will either be sharp spending cuts and tax increases that will affect the next generation or it'll be some kind of financial crisis, whether it's through inflation, whether it's through bank failures, whether it's through a default.

And so we are effectively deferring the pain. And yes, it feels good to pay lower taxes. I like paying lower taxes, we all do. It feels good to get more services, but it comes at a significant cost, and that cost is mostly going to be borne by younger folks.

Dana Taylor:

In your estimation, what incentives would spur Congress to take this issue on?

Marc Goldwein:

So in six and a half years, the Social Security Trust Fund is projected to run out of money. Around the same time, the Medicare Hospital Insurance Trust Fund is also projected to run out of money. The law says when that happens, all social security beneficiaries have to take a haircut. Basically, their benefits fall by a quarter. I think that's going to be a pretty big incentive to act. Politicians do not want to see a typical couple retiree in 2032 see their benefits cut by $18,000, which is what would happen. And so that may be an incentive to act. The risk is that action could be to borrow even more to cover this up, but that would come at a substantial cost in terms of all the things we've already said, increased risk of debt crisis, higher interest rates, et cetera.

Dana Taylor:

Mark, we'd be hard-pressed to find a Republican or a Democrat who says they don't want to leave things better for the generations to come. Is there any consensus on how to stem our rising national debt? What does crossing this threshold of our debt surpassing GDP mean for young people?

Marc Goldwein:

So I do think there's some areas of agreement. We all know from history that capping appropriations both on the defense and non-defense side can help to slow the growth of the debt. There's significant interest in lowering healthcare costs. There's such a tremendous amount of waste and abuse in our healthcare system and Medicare and Medicaid in the private sector that there's actually substantial opportunities to lower costs without cutting benefits. In fact, we can lower costs in ways that save money for the federal government and for beneficiaries. And there's a lot of agreement on some ways to do that. And I think there's an understanding that we have to get social security solvent. We have to avoid this 24% across the board benefit cut. And the reality is that's going to mean more revenue coming in, and it's going to have to mean the change to the benefit formula.

The issue is we're so polarized right now, and in any given day, it is easier for a politician to promise to give away stuff than to take away stuff. And until they can flip the mentality and understand the high cost of inaction, we're not going to solve this.

Dana Taylor:

Finally, you're with the committee for a responsible federal budget. Broadly, what would that look like?

Marc Goldwein:

A responsible federal budget is one that your debt is not growing faster than the economy. Right now, we're borrowing $2 trillion a year. That's 6% of GDP. We've suggested a target of borrowing 3% of GDP a year. That's the target that's used in most European countries and a lot of Africa throughout the world. It's a target that would be sufficient not to solve everything, but to put us on a sustainable path. We can get there. We were there as recently as 2015. That's what we've suggested as a starting point. Would a balanced budget be nice? It would because it would give us that wiggle room for when we have emergencies or new needs, but we don't actually need to balance the budget. All we need to do to have a responsible budget is to bring our spending and revenue more closely together and we can do that in a way that focuses on prioritizing the spending that's most important and on making the tax code the most efficient and pro growth as possible.

Dana Taylor:

Thank you so much for joining me on The Excerpt Marc.

Marc Goldwein:

Thanks so much for having me.

Dana Taylor:

Thanks for listening. I'm Dana Taylor, and that's today's The Excerpt. Like and subscribe so you're back with us tomorrow.