Treasury chief says growth is the only path out of soaring U.S. debt
Treasury Secretary Scott Bessent told reporters that expanding the economy is the sole solution to the United States' mounting debt burden.
Treasury Secretary Scott Bessent addressed reporters ahead of the G20 finance ministers gathering in North Carolina, emphasizing that the global economy is saturated with debt following the financial crisis and COVID-19. He maintained that the United States can only escape its $40 trillion debt mountain by achieving strong growth, a view that many economists doubt. Bessent likened his role to an emergency-room doctor, saying the economy has been stabilized and now enters a healing phase with rising real incomes.
He expressed optimism that artificial intelligence will spark a productivity surge that could be disinflationary. Additionally, Bessent disclosed that he and Office of Management and Budget Director Russell Vought are drafting a fiscal consolidation package to be unveiled in the coming weeks or months. Critics, including Brett Loper of the Peter G. Peterson Foundation, argue that the growth rates required to erase the debt are unrealistically high.
Why it matters
The Treasury's growth-first approach shapes future fiscal policy and impacts investors watching U.S. debt levels.
How this story developed
- Aug 10 U.S. national debt surpasses $40 trillion for the first time
- Aug 19 Treasury data shows the debt crossed $40 trillion.
- Aug 20 Democrats and Republicans expressed outrage over the U.S. gross national debt reaching $40 trillion for the first time.
- Aug 20 30‑year Treasury yields rose to 5.3% and debt held by investors reached about $37.64 trillion.
- Aug 23 The Treasury announced an expanded buy‑back operation for government bonds.
- Aug 23 Treasury announced it will double the size of its long‑dated bond buybacks to at least $4 billion per operation starting in September.
- Aug 25 Treasury said no bonds have been repurchased yet under the expanded buyback program.
- Aug 25 The Treasury announced an expansion of long‑term bond repurchases.
- Aug 26 Treasury indicated it could draw on its $950 billion General Account to fund the expanded buyback program.
- Aug 26 The national debt crossed the $40 trillion threshold.
- Aug 29 President Trump publicly downplayed the $40 trillion debt, asserting that economic growth will resolve the issue.
- Aug 31 Senators John Barrasso and Rep. Greg Steube introduced the Dollar‑for‑Dollar Deficit Reduction Acts.
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