US debt held by the public has passed the size of the economy for the first time since 1946, reaching 100.03 percent of gross domestic product at the end of fiscal year 2026. The milestone, reported by The Wall Street Journal on October 29 and carried by multiple outlets, puts publicly held debt at $32.2 trillion as of September 30.
The ratio rose from 99.4 percent at the end of fiscal 2025, according to the Journal’s account of Treasury and Commerce Department figures. The all-time high remains 106 percent, recorded in 1946 after the borrowing that paid for World War II, meaning the current figure sits close to that post-war record.
A deficit near $2 trillion
The Treasury Department said the fiscal 2026 budget deficit totalled $1.992 trillion, or 6.2 percent of GDP, according to the reporting. Interest costs on government bonds, driven by higher rates, and a widening deficit were cited as the main forces behind the rise.
The Committee for a Responsible Federal Budget had earlier estimated debt held by the public at about $32.3 trillion, equal to roughly 100 percent of GDP, with interest payments topping $1.1 trillion for the year. That estimate, published before the official figures, pointed in the same direction as the final tally.
Why the milestone matters now
Economists note that the ratio had already crossed 100 percent on an intra-year basis earlier in 2026, reaching 100.2 percent at the end of the first quarter, according to the Journal. The fiscal year-end crossing is nevertheless symbolically important because it is the official annual measure.
The Congressional Budget Office has projected debt reaching 120 percent of GDP by 2036, with annual deficits climbing to $3.1 trillion, or 6.7 percent of GDP. With the midterm elections four days away, the debt figure is certain to feature in the closing economic debate.
The debt milestone will now be argued over in political as well as economic terms. Supporters of restraint will cite it as proof that borrowing must slow, while others will argue that growth, interest rates and the composition of spending matter more than a single ratio, and voters will hear both cases in the closing days of the campaign.
