Sizing Up the Debt

President Trump’s domestic policy bill, which the House is debating now on the floor and is expected to vote on soon, would add $3.4 trillion to the federal debt over the next decade. That’s on top of $29 trillion the U.S. already owes.

Numbers that big can lose their meaning. But the debt is not all abstract; it’s money Americans enjoy today but future generations must pay off with interest. The interest America has to pay its lenders will exceed $1 trillion for the first time ever next year — more than we spend on Medicare.

But not all debt is created equal. A trillion dollars means something different in the U.S. than it does in, say, Ireland or Panama.

So how should Americans make sense of the debt? Economists have a few different ways of assessing that, beyond how big or small the total is. Today, I’ll break down three and explain how the U.S. fares on each.

1. Compare it to G.D.P.

Everything is relative. $29 trillion sounds like a lot — and it is. It’s among the biggest fiscal shortfalls ever recorded for a developed nation not at war. But the U.S. also has the largest economy in the world.

Economists often measure debt by how it compares to a country’s economic output, also known as G.D.P. America’s debt is now about the same size as its G.D.P. (Japan and Italy have also crossed that threshold, but few other countries have.)