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.
While Swagel identified potential growth stemming from AI-driven productivity, he noted that economic expansion alone would not be sufficient to resolve the deficit issue.