Current Context (as of November 15, 2025):
The U.S. federal debt held by the public stood at 99.8% of GDP at the end of FY 2025 (September 30, 2025), with gross federal debt at approximately 123%. Two weeks ago (October 31, 2025), the gross debt-to-GDP ratio was 123%, based on $38.019 trillion in total debt.
The U.S. federal debt held by the public stood at 99.8% of GDP at the end of FY 2025 (September 30, 2025), with gross federal debt at approximately 123%. Two weeks ago (October 31, 2025), the gross debt-to-GDP ratio was 123%, based on $38.019 trillion in total debt.
In 2015, the public debt-to-GDP ratio was 73.6% — a level last seen before the post-2008 surge in deficits, the 2017 tax cuts, and pandemic-era spending.
Returning to 73.6% requires reducing the ratio by ~26 percentage points — a historic fiscal pivot. Below is a realistic, multi-pronged strategy President Trump could execute in his second term, leveraging growth, spending discipline, and structural reform.
Core Strategy: Grow GDP Faster Than The debt-to-GDP ratio shrinks when:
- GDP grows faster than debt (denominator effect), or
- Debt growth slows via surpluses or reduced borrowing.
1. Accelerate Real GDP Growth to 3.5–4% Annually
- Policies:
- Full deregulation of energy (oil, gas, nuclear via executive orders.
- Permanent full expensing for business investment.
- AI and manufacturing tax credits.
- Infrastructure via public-private partnerships (no new debt).
- Impact:
- Each 1% extra growth adds ~$300B in annual revenue (dynamic scoring).
- 4 years at 3.5% real growth = +12–15% cumulative GDP → ratio drops 10–12 points.
- Precedent: Reagan (1983–1989): 3.5% avg. The growth rate reduces the ratio from 50% to 41%.
2. Cut $1.5–2 Trillion in Non-Defense Spending (4 Years)
- Targets:
- Entitlements: Means-test Medicare/Social Security for top 10% earners.
- Discretionary: Freeze non-defense at 2020 levels (inflation-adjusted).
- Waste: Eliminate $500B+ in annual improper payments (GAO estimate).
- Tool: Budget reconciliation (bypass filibuster).
- Impact:
- Reduces annual deficit by $400–600B.
- Ratio drops 8–10 points over 4 years.
- Precedent: Clinton-era welfare reform + spending caps → surpluses.
3. Increase Revenue Without Raising Tax Rates
- Policies:
- Extend 2017 TCJA with pro-growth tweaks (full expensing, R&D credit).
- 10–20% universal tariff → ~$300B/year (offsets TCJA cost).
- Close loopholes: carried interest, corporate inversions.
- Impact:
- +$500–800B/year in revenue.
- Achieves primary surplus (deficit before interest).
- Ratio drops 5–7 points.
- Trump Edge: Tariffs align with “America First” trade policy.
4. Slash Net Interest Costs
- Current: $1.21T/year (17% of the federal budget).
- Strategy:
- Lower yields via Fed pressure (target 3–4% 10-year).
- Shorten debt maturity during low-rate windows.
- Impact:
- 1-point yield drop = $300B annual savings.
- Ratio drops 3–5 points indirectly via growth.
5. Structural Reforms for Long-Term Stability
- Bipartisan Fiscal Commission (modeled on Simpson-Bowles).
- Raise full retirement age to 69 (phased).
- Sovereign wealth fund from federal land/oil royalties.
- Impact: Locks in 1% productivity growth → ratio to 60% by 2035.
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Projected Path to 73.6% (Public Debt-to-GDP)
Political & Economic Realities
Conclusion: President Trump can return to 2015-level debt sustainability — not through austerity alone, but via high-growth, high-discipline governance.
It’s the Reagan-Clinton hybrid: deregulate, cut waste, grow revenue, reform entitlements 73.6% is not nostalgia — it’s national security.
Projected Path to 73.6% (Public Debt-to-GDP)
Scenario | 4-Year GDP Growth | Annual Deficit Cut | Ratio in 2029 |
|---|---|---|---|
Aggressive (Trump Max) | 3.5% | $600B | ~78% |
Realistic | 3.0% | $400B | ~83% |
Baseline (No Change) | 2.0% | $1.8T deficit | 108% |
Full 73.6% achievable by 2031–2033 with sustained 3%+ growth and primary surpluses.
Political & Economic Realities
- Congress: Reconciliation for tax/spending; entitlements need 60 votes.
- Risks: Tariffs → short-term inflation; spending cuts → political backlash.
- Trump Advantage: GOP control + deal-making (“one big beautiful bill”).
Conclusion: President Trump can return to 2015-level debt sustainability — not through austerity alone, but via high-growth, high-discipline governance.
It’s the Reagan-Clinton hybrid: deregulate, cut waste, grow revenue, reform entitlements 73.6% is not nostalgia — it’s national security.
Published by Editor, Sammy Campbell.