Peter St Onge, Ph.D. is one of my favorite X personalities in the finance world. He just posted a great post, and it prompted me to do a little digging. I have also reached out to him to be in the Energy News Beat Podcast. It would be fun to have Peter and Christopher Messina, author of Messina’s Federal Budget, on the same podcast. Christopher has been on the podcast before and had incredible insights into the federal budget issues.
The bottom line is that I feel like that song that goes, Clowns to the left of me… Well, it is now “Democrats to the Left of Me, Rinos to the right of me, and I am stuck in the middle, going broke.
Peter writes “We need 6.7% economic growth just to keep up with the national debt. Which would require doubling growth — for decades. What would it take?”
We need 6.7% economic growth just to keep up with the national debt.
Which would require doubling growth — for decades.
What would it take? pic.twitter.com/s9LxOPr967
— Peter St Onge, Ph.D. (@profstonge) May 29, 2025
Key Points
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Research suggests that growing the economy faster than debt and spending is possible with the right policies, but it’s complex and debated.
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It seems likely that boosting productivity, cutting regulations, and investing in innovation can help, though opinions vary on trade-offs.
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The evidence leans toward controlling spending through entitlement reforms and tax adjustments, but political resistance is a challenge.
Understanding Economic Growth vs. Debt and Spending
To grow the U.S. economy faster than the national debt and congressional spending, we need a mix of strategies that boost economic output while managing fiscal responsibilities. Here’s a simple breakdown:
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Boosting the Economy: Focus on increasing productivity through education, technology, and innovation. For example, policies that encourage business investments, like tax write-offs, can create jobs and raise wages. Supporting housing and energy production can also help, as these sectors show growth potential.
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Controlling Debt and Spending: This involves reforming big programs like Social Security and Medicare to reduce costs, cutting wasteful spending, and possibly adjusting taxes to increase revenue without slowing growth. It’s tricky, as these changes can face political pushback.
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Balancing Act: The goal is to grow GDP (currently at $28 trillion, growing 2-3% yearly) faster than debt (growing 5-6% yearly, reaching $36 trillion by 2025). Success means keeping the debt-to-GDP ratio, now at 120%, from getting worse.
These steps aren’t guaranteed and depend on political will and global factors, but they offer a path forward.
Survey Note: Detailed Analysis on Growing the U.S. Economy Faster Than Debt and Spending
This analysis, based on the most recent data as of May 29, 2025, explores strategies to grow the U.S. economy faster than the national debt and congressional spending, drawing from authoritative sources like the Congressional Budget Office (CBO), Government Accountability Office (GAO), and economic analyses from the Tax Foundation. The U.S. faces a significant fiscal challenge, with federal debt held by the public projected to rise from 100% of GDP in 2025 to 118% by 2035, and deficits growing from $1.9 trillion in 2025 to $2.7 trillion by 2035 Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035. This section provides a comprehensive overview, including economic projections, policy options, and challenges, to address the user’s query.
Economic Context and Projections
The U.S. economy, with a current GDP of $28 trillion in 2024, is projected to grow at 2-3% annually, while debt is growing at 5-6% annually, reaching $36 trillion by 2025 Government Accountability Office – America’s Fiscal Future. The debt-to-GDP ratio, currently at 120%, is a concern, with the GAO noting that public debt is projected to reach 200% of GDP by 2047 if unaddressed Government Accountability Office – The Nation’s Fiscal Health: Strategy Needed as Debt Levels Accelerate. The CBO’s projections indicate that real GDP growth will cool from 2.3% in 2024 to 1.9% in 2025 and 1.8% in 2026, averaging 1.8% per year through 2035, with 80% of this growth attributed to labor force productivity Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035. Residential investment is expected to grow by 6.4% on average in 2025-2026, contributing 0.3 percentage points to GDP growth, boosted by falling interest rates and demand for new homes Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035.
Federal outlays are projected to rise from $7.0 trillion (23.3% of GDP) in 2025 to $10.7 trillion (24.4% of GDP) by 2035, while revenues increase from $5.2 trillion (17.1% of GDP) to $8.0 trillion (18.3% of GDP) Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035. Net interest outlays are expected to grow to 4.1% of GDP by 2035, exceeding defense outlays from 2025-2035 and nondefense discretionary spending from 2027-2035, the highest since at least 1940 Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035. Tax expenditures, estimated at $2.3 trillion in 2025 (7.6% of GDP, 44% of federal revenues), exceed discretionary outlays, highlighting potential areas for revenue enhancement Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035.
Strategies to Boost Economic Growth
To outpace debt and spending, policies must focus on accelerating economic growth. Research suggests several approaches:
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Enhancing Productivity and Innovation: With 80% of GDP growth post-2026 due to labor force productivity, policies enhancing education, technology, and innovation are critical. For example, R&D tax credits and public-private tech initiatives can drive long-term growth, as the U.S. leads in AI and biotech but faces competition from China, projected to grow at 4-5% in 2025 EY – 2025 global economic outlook: momentum and uncertainty. The Tax Foundation notes that tax policies encouraging business investments, like immediate write-offs, can boost productivity, jobs, and wages, partially offsetting revenue losses through growth Tax Foundation – Can Economic Growth Help Solve US Debt Problem?.
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Increasing Labor Force Participation: The labor force participation rate, around 62% in 2024, is a drag on growth. Expanding vocational training, apprenticeship programs, and immigration reforms to fill labor shortages, particularly in manufacturing and tech, can help. For instance, training 3 million workers with AI programs, as suggested in an X post, could support a 4% GDP growth target by 2045 X post by @Pindlesin.
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Supporting Key Sectors: Residential investment growth (6.4% average 2025-2026) suggests housing market stimulation via lower interest rates and addressing supply constraints can drive economic expansion. Unleashing American energy production, as advocated by Trump’s Treasury Secretary Scott Bessent, can reduce dependence on foreign energy and boost output, potentially turbocharging the economy X post by @KanekoaTheGreat.
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Trade Expansion: Pursuing free trade agreements can open markets for U.S. goods and services, boosting exports (currently 12% of GDP). Reducing trade barriers can increase this share, as noted in Deloitte’s 2025 economic forecast Deloitte Insights – US Economic Forecast Q1 2025.
Controlling Spending and Debt
While growth is essential, controlling spending is crucial to prevent debt from outpacing GDP. The GAO emphasizes the need for a strategy to address the unsustainable fiscal path, with public debt growing more than twice as fast as the economy Government Accountability Office – The Nation’s Fiscal Health: Strategy Needed as Debt Levels Accelerate. Strategies include:
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Reform Entitlement Programs: Social Security, Medicare, and Medicaid account for roughly 50% of federal spending. Gradual reforms, such as raising the retirement age, means-testing benefits, or introducing market-based reforms (e.g., premium support for Medicare), can reduce long-term liabilities. The CBO notes these programs are key drivers of outlay growth Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035.
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Reduce Tax Expenditures: Limiting deductions, credits, and exemptions, estimated at $2.3 trillion in 2025, could free up resources. For example, an X post by
@groksuggests a 5% value-added tax could raise $2.2–3.4 trillion over a decade, though it may slow growth X post by @grok.
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Impose Spending Caps: Multi-year caps on non-defense discretionary spending, as suggested in an X post, can help control outlays. Historical examples, like the 2011 Budget Control Act, show caps can slow spending growth, though adherence is critical X post by @YoungBheems.
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Address Interest Costs: With interest payments projected to hit $1 trillion annually by 2030, refinancing debt at lower rates (if feasible) or slowing borrowing is essential. Higher growth can also reduce the debt-to-GDP ratio Congressional Budget Office – The Long-Term Budget Outlook: 2025 to 2055.
Fiscal Responsibility and Tax Reform
The expiry of the 2017 Tax Cuts and Jobs Act in less than two years presents an opportunity for reform. The Tax Foundation suggests rewriting the tax code to prioritize lowering the debt-to-GDP ratio, addressing mandatory spending, and maintaining pro-growth policies Tax Foundation – 2025 Tax Reform Options After Tax Cuts and Jobs Act. Options include extending investment-friendly provisions while broadening the tax base to increase revenues without raising rates.
An X post by
@CathieDWood
highlights deregulation, government spending cuts, tax cuts, and a focus on technologically enabled innovation as likely to turbocharge the economy, echoing Reagan-era policies X post by @CathieDWood. However, balancing revenue and growth is debated, with some suggesting a value-added tax to raise funds, though it may slow economic activity X post by @grok.
Leveraging Deregulation and Innovation
Reducing regulatory burdens can encourage entrepreneurship and investment. The U.S. Chamber of Commerce estimates regulatory compliance costs businesses $1.9 trillion annually, suggesting that streamlining regulations can boost small businesses, which create 60-70% of new jobs Small Business Administration – Small Business Economic Impact. An X post by
@UniteTheConvo
discusses growing the economy to handle debt without cuts, linking to an article that likely explores this concept X post by @UniteTheConvo.
Focusing on technology and innovation is another lever, with policies like R&D tax credits and public-private partnerships driving long-term growth. The EY 2025 global economic outlook notes the U.S. as a growth leader, but competition from China requires sustained innovation efforts EY – 2025 global economic outlook: momentum and uncertainty.
Challenges and Trade-Offs
Implementing these strategies faces significant challenges. Political resistance to entitlement reforms and spending cuts is strong, as noted in X posts and CBO reports. Global competition, with China’s projected 4-5% GDP growth, adds pressure, and recurring debt ceiling debates create uncertainty Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035. Trade-offs include potential slowdowns from tax hikes, as suggested by@grok , and the need for bipartisan commitment to long-term planning.
Measuring Success
Success can be measured by achieving GDP growth above 3% annually while keeping debt growth below 3%, reducing the debt-to-GDP ratio from 120% to below 100% over a decade. The Tax Foundation notes that economic growth can cushion fiscal adjustments, but sustainable debt reduction requires combining growth with spending cuts and potential tax hikes Tax Foundation – Can Economic Growth Help Solve US Debt Problem?.
Detailed Projections and Data
To provide a clearer picture, here’s a table summarizing key economic and fiscal projections from the CBO:
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Category
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2025
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2035
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Notes
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|---|---|---|---|
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Real GDP Growth
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1.9%
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1.8% (average)
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Cools from 2.3% in 2024
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Federal Debt (as % of GDP)
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100%
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118%
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Surpasses 1946 high of 106%
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Deficit
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$1.9 trillion (6.1% of GDP)
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$2.7 trillion (6.1% of GDP)
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Grows steadily, exceeds 50-year average 3.8%
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Outlays
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$7.0 trillion (23.3% of GDP)
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$10.7 trillion (24.4% of GDP)
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Driven by entitlements, interest costs
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Revenues
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$5.2 trillion (17.1% of GDP)
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$8.0 trillion (18.3% of GDP)
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Increases, but outpaced by outlays post-2027
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Net Interest Outlays
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N/A
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4.1% of GDP
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Exceeds defense spending from 2025-2035
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This table, sourced from Congressional Budget Office – The Budget and Economic Outlook: 2025 to 2035, highlights the fiscal trajectory and areas for intervention.
Conclusion
Growing the U.S. economy faster than debt and spending requires a balanced approach of pro-growth policies—such as deregulation, tax reform, innovation, and workforce development—combined with fiscal discipline, including entitlement reforms and spending controls. Addressing the expiry of the 2017 tax reforms and leveraging insights from recent X discussions, like those by
@CathieDWood
and
@KanekoaTheGreat
, can guide policy. While economic growth can help, sustainable debt reduction will likely require bipartisan commitment and a mix of strategies, acknowledging the complexity and trade-offs involved.
Key Citations