To 'grow our way out' of the $40T deficit, as Bessent said, the US economy must grow at a rate not seen in 50 years

The average bond yields since January 2025 have been around 4.2%, while the federal budget deficit was slightly less than 5.2%. Given that the debt held by the public amounts to roughly [100%](https://www.cbo.gov/publication/62105), the government needs 9.4% of nominal GDP growth to outpace the growth of the debt while in reality it was only 5.9%.

Over a significant period of time, the required nominal GDP growth rate hasn’t been seen since the [1970s](https://fred.stlouisfed.org/series/A191RP1Q027SBEA). Since then, we've seen the Reagan and Bush tax cuts that promised exactly that and failed. Over the 8 years that Trump’s tax cuts were in effect, they failed to accelerate GDP growth either.

The only realistic way to stop the debt from spiraling out of control is to reduce the budget deficit and lower inflation by cancelling tariffs and solving the problem with the Strait of Hormuz, which keeps oil prices elevated. But the Trump administration is doing just about the opposite of all that.