Between October and December, US federal government spending exceeded revenues by $711 billion and has set a new record.

On this basis, the debt-to-GDP of the US currently stands at around 120% and was only higher during the pandemic in 2020. The US debt-to-GDP ratio has exceeded the 100% level since 2012.

In fact, some members of the administration have spoken about lowering the deficit-to-GDP ratio to 3%. 3. Interest rates Higher interest rates will further boost the US government’s debt service costs ...

In order to service its debt and meet obligations, the US needs to borrow even more ... The budget deficit would balloon from 6% of GDP to 11% or 18%, respectively," Gundlach calculated.