At first glance, the news that the United States national debt had exceeded the size of the American economy may be worrisome. But Northeastern University economists said the milestone was largely symbolic. “It was, in a sense as far as the market’s concerned, non-news,” said Bob Triest, professor of economics at Northeastern. In fact, indexes reached record highs following the news, and have continued to roar. Triest explained that the market had already “priced in” such an event because the milestone was expected due to the projections of the national debt, which is the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation’s history.
And while Triest called the debt surpassing the nation’s Gross Domestic Product (GDP), the total value of final goods and services produced in an economy in a year, “concerning,” he noted that the debt-to-GDP ratio is currently “just inching up a little bit.” “What’s really concerning is that it’s projected to continue inching up over time,” Triest said.
