Economist Steve Hanke Sounds Alarm As US Debt Tops 100% of GDP, Calls For Constitutional Fix

Professor Steve Hanke, an economist at Johns Hopkins University, called for a constitutional debt brake in the U.S. in an X post on Thursday.

He shared a post citing Bureau of Economic Analysis data showing U.S. national debt has crossed 100% of GDP for the first time since World War II.

Numbers Behind The Milestone

The U.S. national debt reached 100.2% of Gross Domestic Product (GDP) at the end of March, according to data from the Bureau of Economic Analysis, marking the first time it has exceeded the size of the economy since World War II. Debt held by the public stood at $31.27 trillion, compared with nominal GDP of $31.22 trillion over the prior 12-month period.

The federal government’s interest payments on public debt reached $529 billion in the first half of fiscal year 2026, nearly equaling combined spending on defense ($461 billion) and education ($70 billion), according to the CBO. The federal deficit totalled $1.2 trillion from October through March, with total outlays of $3.7 trillion.

What the Balance Sheet Shows

The Treasury's latest financial statement showed the U.S. government ended fiscal 2025 with $6.06 trillion in assets and $47.78 trillion in liabilities, a negative net position of $41.72 trillion.

Hanke has previously described the federal government as functionally insolvent, estimating that on a household scale, it earns $52,446 a year while spending $73,378. Subprime loan delinquency rates have also hit 10%, an 11-year high, according to Equifax and Moody’s Analytics.

Growth With a Catch

The broader economy is still expanding, but unevenly. U.S. GDP expanded at an annualised rate of 2% in the first quarter, above the prior 0.5% pace but below the 2.3% economists expected. Core PCE, the Fed’s preferred inflation gauge, rose 3.2% year over year in March, driven largely by energy costs tied to the Iran conflict.

JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon has warned that the country’s fiscal trajectory cannot be ignored indefinitely.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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