<p class="wp-block-paragraph">Fiscal hawks are skeptical of Treasury Secretary Scott Bessent’s claim that the United States can grow its way out of its $40 trillion debt, absent other reforms.</p>
<p class="wp-block-paragraph">Last week, the U.S. national debt hit $40 trillion, sending yields on long-term Treasury securities to multiyear highs. Bessent stated in an interview that there is “nothing magic” about the $40 trillion milestone and that the government “can grow our way out of that.”</p>
<p class="wp-block-paragraph">However, most fiscal hawks and many economists argue that growing gross domestic product enough to address the debt is not a feasible solution and that a fiscal crisis looms if the government doesn’t enact reforms to lower spending or raise revenues.</p>
<p class="wp-block-paragraph">“You have to keep your nominal GDP growing ahead of your servicing costs, so that you can stabilize the debt … but you can’t grow your way out of total debt reduction,” former Speaker of the House Paul Ryan (R-OH) told the Washington Examiner during an interview.</p>
<p class="wp-block-paragraph">Ryan acknowledged that while growth is necessary to address fiscal problems, reforms are also needed for entitlement programs such as Social Security and Medicare.</p>
<p class="wp-block-paragraph">“There’s no getting around that,” the former speaker and longtime fiscal hawk said.</p>
<p class="wp-block-paragraph">Former Rep. Carolyn Bourdeaux, now the executive director of the Concord Coalition, which focuses on balancing the budget, stated that increasing economic growth enough to offset the government’s deficits is not feasible at this stage. Instead, she emphasized the need for revenue increases and spending cuts to balance the budget.</p>
<p class="wp-block-paragraph">“There’s zero chance we’re going to be able to grow our way out of this right now, given the current deficits that we run,” she said.</p>
<p class="wp-block-paragraph">This month, the Treasury Department confirmed a $1.8 trillion deficit in the first 10 months of fiscal 2026.</p>
<p class="wp-block-paragraph">The overall national debt first crossed the $1 trillion mark in 1981, but lawmakers of both parties have done little to reduce debt and deficits since the temporary run of balanced budgets from fiscal 1998 through fiscal 2001.</p>
<p class="wp-block-paragraph">Budget experts indicate that the mismatch between federal spending and revenues precludes balancing the budget through economic growth.</p>
<p class="wp-block-paragraph">Brett Loper, the executive vice president for policy at the Peter G. Peterson Foundation, a nonprofit organization focused on reducing federal deficits, stated that in order to grow the U.S. out of its debt over the next decade, the economy would need to experience an annual growth rate of 4.3% every year.</p>
<p class="wp-block-paragraph">According to the group’s modeling, the economy has never sustained that 4.3% growth rate. For instance, last year the economy grew at 2.1%, and the year before, GDP expanded at a 2.8% pace.</p>
<p class="wp-block-paragraph">Loper noted that three authoritative forecasters — the Congressional Budget Office, the Federal Reserve, and the Blue Chip survey of forecasters — are all predicting annual growth of 2% or below for the next decade.</p>
<p class="wp-block-paragraph">Without changes, economic growth would need to double every year from projected levels to meet Bessent's expectations.</p>
<p class="wp-block-paragraph">Loper described such growth as “all but unattainable.”</p>
<p class="wp-block-paragraph">“We haven’t had annual productivity growth reach anything like that for any sustained period of time since World War II,” he said.</p>
<p class="wp-block-paragraph">Additionally, Loper mentioned headwinds to faster growth, such as the declining worker-to-retiree ratio, existing debt levels, and the interest payments the government is already making.</p>
<p class="wp-block-paragraph">“So you have all these headwinds that would make this difficult, and no historical precedent for it getting to the rate that would be needed to grow our way out,” he said.</p>
<p class="wp-block-paragraph">Caleb Quakenbush, director of fiscal policy at the Bipartisan Policy Center, emphasized the importance of growth but noted that the circumstances today differ from those after World War II.</p>
<p class="wp-block-paragraph">“We have an aging population that’s putting a lot of pressure on our entitlement programs, Social Security, Medicare, healthcare,” Quakenbush said. “[Artificial intelligence] is still a huge question mark in terms of what its long-run impact on economic growth is going to be.”</p>
<p class="wp-block-paragraph">Bourdeaux suggested that a bipartisan fiscal commission could help address the debt situation, along with a plan from the White House to eliminate the deficit in its annual budget proposal.</p>
<p class="wp-block-paragraph">“I would love to see a series of plans like that, that the president starts to put on the table and starts to close the gap,” she said. “And I think that would definitely help reassure the bond market that there’s actually going to be a push to try to resolve the problem.”</p>
<p class="wp-block-paragraph">Quakenbush expressed hope that policymakers will address this challenge in a bipartisan manner and work to halve deficits, which would likely require raising revenues and adjusting entitlement programs.</p>
<p class="wp-block-paragraph">“And I think what that does is it sends an important signal to our lenders that the government is serious about tackling its fiscal imbalances, which could ease some of the pressure in the bond markets on our debt, and it also provides certainty for planning,” he said.</p>