Jackson Hole Paper Says US Debt Could Reach 250% of GDP Without Raising Rates Amid Projected 120% Debt Next Decade

A paper presented at the 2025 Jackson Hole Economic Policy Symposium suggests that U.S. government debt could rise to 250% of gross domestic product without causing upward pressure on interest rates. This projection contrasts with the current debt level, which stands at approximately 120% of GDP. The paper’s findings imply that the U.S. could sustain a debt burden similar to Japan's without immediate financial instability in terms of borrowing costs. However, separate projections indicate that U.S. debt is expected to reach 120% of GDP over the next decade due to widening federal deficits. Economists have expressed concerns about the growing debt levels, with warnings that a severe U.S. debt crisis could become a realistic possibility in the future.