Political Stalemate to Drive U.S. Debt Higher Than Italy and Greece by 2030

The United States is on track to become one of Europe’s most indebted countries, with the International Monetary Fund (IMF) predicting that its public debt will overtake that of both Italy and Greece before 2030. The IMF projects that America’s debt-to-GDP ratio will climb from its current 125% to 143% by the end of the decade, surpassing Italy’s 137% and Greece’s 130%, according to

. This would mark the first time in a hundred years that the U.S.—long considered a model of fiscal responsibility—will carry a greater debt load than nations often associated with debt crises, as reported by the .

This dramatic shift is attributed to a mix of tax reductions, increased military expenditures, and a lack of fiscal discipline under President Donald Trump’s administration. The sweeping legislation passed by Congress in 2025 reduced taxes for wealthy individuals and corporations, while also boosting defense spending, including a $1 trillion “golden dome” defense shield initiative. Experts say these policies have pushed annual deficits above 7% of GDP—higher than any other major economy—and are expected to remain at these levels through 2035. The national debt has already exceeded $38 trillion, according to the

.

In comparison, both Italy and Greece have made progress in improving their fiscal positions. Italy aims to bring its deficit down to 2.9% of GDP in 2025, meeting the EU’s 3% target a year ahead of schedule, while Greece is projected to reduce its debt-to-GDP ratio from 146% in 2020 to 130% by 2030, The Guardian reports. These improvements are the result of austerity policies and structural changes, supported by EU recovery funds, which have helped both countries rein in spending and increase revenues, as highlighted by the

. Meanwhile, the U.S. is mired in political stalemate, with Democrats opposing spending reductions and Republicans rejecting tax increases, leaving the debt problem unaddressed, according to .

Experts caution that America’s current fiscal path cannot be sustained. “Running ongoing deficits is the result of the present fiscal approach,” said Mahmood Pradhan of Amundi Investment Institute. “However, Italy’s slower economic growth still poses long-term issues,” analysts add. The U.S. currently benefits from the dollar’s reserve currency status and its robust capital markets, which offer some short-term relief, but these advantages are not limitless. The rising cost of servicing the debt, which now exceeds spending on education and transportation, could eventually limit funding for infrastructure and social programs.

The Federal Reserve’s interest rate hikes have worsened the situation, causing U.S. debt interest payments to double in just three years. Each 1% increase in rates adds $380 billion a year to borrowing costs, further reducing fiscal flexibility. Without significant changes, the U.S. could lose investor trust, face higher borrowing costs, and have less capacity to respond to future economic downturns.

As the debt continues to mount, Trump’s trade policies—such as a 10% tariff hike on Canadian imports—underscore his administration’s emphasis on protectionism rather than fiscal restraint. While tariffs may boost revenue in the short term, economists warn they could provoke retaliation and trade disputes, putting additional pressure on the economy.

Both the IMF and the Congressional Budget Office emphasize that stabilizing U.S. debt will require major reforms, including either spending cuts or tax hikes. “Democrats are unwilling to reduce programs, and Republicans refuse to raise taxes,” said Joe Gagnon of the Peterson Institute. “This deadlock is difficult to resolve.” With the debt-to-GDP ratio nearing 140%, the U.S. stands at a fiscal turning point. Without decisive measures, it risks joining the ranks of countries it once counseled on sound financial management.