Treasury Secretary Scott Bessent said the U.S. doesn’t have a revenue problem. It has a spending problem. And we’ll grow our way out.
Nice line. Here’s the math.
Debt is over $40 trillion. The economy is about $32.5 trillion. That’s 123% debt-to-GDP — the number bond investors watch.
“Grow our way out” does not mean the debt shrinks. It means the debt keeps rising, just slower than GDP. Debt has been growing about 6.7% a year. You need roughly 7% growth to dent the ratio. Bessent’s growth number is 3%.
The other 4% is inflation. Last year’s GDP was +6.5%. Only 2% was real output. 4.5% was prices.
At 4% a year, the dollar loses about a third of its purchasing power in a decade. Governments can print money. They cannot print gold, oil, or the rest of what’s real.
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