Political Gridlock Pushes U.S. Debt Past Italy, Greece by 2030

The U.S. is set to join the ranks of Europe's most indebted nations, with its public debt projected to surpass those of Italy and Greece by the end of the decade, according to International Monetary Fund (IMF) forecasts. The U.S. debt-to-GDP ratio is expected to rise from 125% today to 143% by 2030, eclipsing Italy's 137% and Greece's 130%, according to The Guardian. This marks the first time in a century that the U.S., long a symbol of fiscal prudence, will carry a heavier debt burden than countries historically synonymous with debt crises, according to the Economic Times.

The shift stems from a combination of tax cuts, surging defense spending, and a lack of fiscal restraint under President Donald Trump's policies. The "big, beautiful bill" enacted by Congress in 2025 slashed taxes for high-income earners and corporations while expanding defense budgets, including a $1 trillion "golden dome" defense shield project, measures that analysts say have pushed annual budget deficits above 7% of GDP—higher than any other advanced economy—and are projected to persist through 2035. The U.S. national debt has already crossed $38 trillion, as reported by the Financial Express.

In contrast, Italy and Greece have made strides in stabilizing their finances. Italy plans to reduce its deficit to 2.9% of GDP in 2025, meeting the EU's 3% threshold a year early, while Greece is on track to cut its debt-to-GDP ratio from 146% in 2020 to 130% by 2030, according to The Guardian. Both nations have implemented austerity measures and structural reforms, aided by EU recovery funds, to curb spending and boost revenues, a trend shown by the Financial Times. Meanwhile, the U.S. faces political gridlock, with Democrats resisting spending cuts and Republicans opposing tax hikes, leaving the debt trajectory unchecked, according to Newsmax.

Economists warn that the U.S. path is unsustainable. "Running perpetual deficits is the impact of the current fiscal strategy," said Mahmood Pradhan of Amundi Investment Institute. "But Italy's weaker growth means it still faces long-term challenges," experts note. The U.S. benefits from its reserve-currency status and deep capital markets, which provide temporary relief, but analysts caution these advantages are not infinite. Rising debt servicing costs, already surpassing education and transportation budgets, could crowd out funding for infrastructure and social programs.

The Federal Reserve's rate hikes have exacerbated the crisis, with interest payments on U.S. debt doubling in three years. Every 1% rate increase adds $380 billion annually to borrowing costs, straining fiscal flexibility. Without reforms, the U.S. risks losing investor confidence, triggering higher borrowing costs, and reducing its ability to respond to future economic shocks.

As the debt burden grows, Trump's trade policies—such as a 10% tariff increase on Canadian goods—highlight his administration's focus on protectionism over fiscal discipline. While tariffs generate short-term revenue, economists argue they risk retaliatory measures and trade wars, further straining the economy.

The IMF and Congressional Budget Office both stress that stabilizing U.S. debt will require structural reforms, including spending cuts or tax increases. "Democrats don't want to cut programs, and Republicans won't raise taxes," noted Joe Gagnon of the Peterson Institute. "This stalemate is hard to break." With debt-to-GDP ratios approaching 140%, the U.S. faces a fiscal crossroads. Without urgent action, it may soon join the very countries it once advised on fiscal prudence.