The Congressional Budget Office projects the US debt-to-GDP ratio to grow from 97% in 2023 to 116% by 2034. For perspective, the US debt-to-GDP ratio during World War 2 was 116%, the highest debt-to-GDP ratio that the US has experienced. While the chart below is from 2012, add the tax cuts, the new wars that occurred, and the pandemic and the chart will look worse.

Since forecasting the US debt-to-GDP ratio comes with many variables, Bloomberg Economics ran a million simulations to predict the likelihood that this ratio will increase. As Bloomberg noted, “[i]n 88% of the simulations, the results show the debt-to-GDP ratio is on an unsustainable path - defined as an increase over the next decade.” From that, I wondered why 12% of the simulations showed the debt-to-GDP ratio on a sustainable path.

You can learn about the 12% of simulations that show how the US debt-to-GDP ratio is on a sustainable path in my Substack article in the link below: