US federal deficit at 6% of GDP
The US runs federal budget deficits of around 6% of GDP annually, with total national debt now at roughly 100% of GDP — or $31 trillion.
Snapshot · Freakonomics Radio
684. He Helped Clean Up the Last Crash. Does He See Another One Coming?
Explore episode
Aug 7, 2026
Where this was said
America's Unsustainable Debt and the Missing Political Will
At 6:51 · chapter starts 6:50
The US federal government collects about 17% of GDP in revenues but spends 23%, leaving a structural 6-point gap that currently compounds to $1.7 trillion in annual deficits. Gensler walks through why this is nearly unfixable through politically available tools: entitlements — Social Security, Medicare, Medicaid — eat up the vast majority of spending, leaving only about 4% of GDP in discretionary spending, half of which is Defense. Responding to a question from Brookings economist Jessica Riedel about whether markets can absorb $200 trillion in projected borrowing over 30 years, Gensler is blunt: no. He explains that the yield curve — the spread between 2-year and 10-year Treasury borrowing costs — has historically been 80–100 basis points, but was suppressed to 40–50 basis points by global central banks and China's excess savings. That suppression allowed the US to lean in on deficit spending. It can't last. He adds that tax cuts under Bush and both Trump terms have structurally reduced federal revenues from roughly 20% of GDP in the 1990s to 17% today, making the fiscal math even harder.
The US Debt Reckoning: $31 Trillion and Counting
The US runs a 6% of GDP annual deficit and carries $31 trillion in debt. Gensler says the analysis is clear: this is unsustainable. But the political consensus to fix it simply doesn't exist.
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