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Phillip Swagel, director of the Congressional Budget Office, stated that the United States would need 5 to 6 percent real gross domestic product growth and 7 to 8 percent nominal growth to stabilize its debt-to-GDP ratio.
This assessment assumes that Treasury borrowing costs remain near 4 to 5 percent.
Swagel characterized the current fiscal trajectory as unsustainable, noting that federal debt currently sits at approximately 100 percent of GDP with a structural deficit of 6 percent.
He cautioned that rising interest rates could trigger a feedback loop, which would lead to increased deficits, higher debt levels, and elevated borrowing costs.
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