US National Debt Grew Slower In 2025 – OpEd
The U.S. national debt has exploded in recent years. At the end of its 2025 fiscal year, the U.S. government’s total public debt outstanding stood at $37.638 trillion, an increase of $2.173 trillion from its 2024 fiscal year-end figure of $35.465 trillion.
Analyzing the FY 2025 Slowdown
That is more than the U.S. economy’s gross domestic product, which stood at $31.098 trillion at the end of the federal government’s 2025 fiscal year. That puts the U.S. government’s debt-to-GDP ratio at 121%, a small increase from FY 2024’s national debt-to-GDP ratio of 120.2% and well above the World War 2-era peak of 106%.
Both the U.S. GDP and national debt at the ends of FY 2024 and FY 2025 are shown in the chart below. The chart also breaks down the “publicly-held” and “intragovernmental” portions of the national debt.
The publicly-held portion is the part of the national debt that’s been borrowed from U.S. and foreign individuals and institutions. In 2025, this portion of the national debt was 97.3% of the nation’s annual GDP. That’s an increase from the 95.9% recorded in the 2024 fiscal year.
The intragovernmental portion is the debt that the government has “borrowed” from itself, primarily from Social Security’s Old Age and Survivors Insurance trust fund and the pension funds the government manages for its civilian and military employees. The intragovernmental portion of the national debt was 23.7% of GDP in FY 2025, decreasing from 24.3% in FY 2024. This is a direct consequence of Social Security’s trust fund running in the red, which it has been doing every year since 2009. Because of this, the share of publicly held debt has been increasing to support the U.S. government’s excessive spending.
Now for a surprise. The year-over-year changes in the publicly held portion of the national debt and the total public debt outstanding declined during the 2025 fiscal year. The chart below visualizes the changes from FY 2023 to FY 2024 and from FY 2024 to FY 2025:
These positive changes can be attributed to the fiscal trends the Trump administration put in motion during the eight months of the 2025 fiscal year, during which it could influence government spending and tax collections. During these months, the Trump administration sought to reduce the Biden administration’s wasteful spending and also increased tariffs. Slower growth in the national debt is the result of these initiatives.
Why Congressional Action is the Final Piece of the Puzzle
That said, if the Trump administration is to truly succeed in putting the U.S. government on a more sustainable fiscal path, it needs the U.S. Congress to commit to restraining spending growth to be slower than the growth of the government’s tax collections. During FY 2025, the Trump administration effectively ran a fiscal experiment to show it’s possible to slow the growth of the national debt without Congressional action. Still, the lesson is that the outcome is unreliable without it. Congress must act to change the nation’s fiscal course.
Until Congress acts, the U.S. government is on course to careen from one fiscal crisis to the next, with ever-worsening outcomes as a result. The only people that’s good for are the worst politicians in Washington, D.C., who routinely put their own interests ahead of those of the taxpayers who will be stuck paying their tabs. It’s past time for serious reform.
- This article was also published at the Independent Institute