Wharton Economist Says Trump’s $40 Trillion Debt Growth Plan Is Virtually Impossible
Updated
Updated · Yahoo Finance · Aug 25
Wharton Economist Says Trump’s $40 Trillion Debt Growth Plan Is Virtually Impossible
3 articles · Updated · Yahoo Finance · Aug 25
Summary
Kent Smetters said the Trump administration is unlikely to “grow its way out” of a $40 trillion U.S. debt load, calling the idea a “fantastic story” but not a feasible fiscal strategy.
At issue is not the headline debt figure alone but the debt-to-GDP ratio, now about 122%, which economists and bond investors watch as the clearer measure of repayment capacity.
Smetters argued the causality runs the other way: governments address debt to support growth, rather than relying on faster growth to solve the debt problem by itself.
Market pressure is already building, with the 30-year Treasury risk premium rising above 5.3% and Treasury Secretary Scott Bessent responding with at least $4 billion in unscheduled buybacks.
The critique undercuts the White House’s latest debt fix after earlier ideas—including tariffs and $5 million “golden visas”—also drew skepticism or ran into legal setbacks.