Economist Warns U.S. Debt Has Reached World War II-Era Levels Despite Economic Growth

The United States' debt burden has reached levels last seen during World War II even as the economy continues to expand, raising concerns that the government's fiscal flexibility could be significantly reduced before the next recession, according to economist Conrad DeQuadros. Omor Ibne Ehsan reported for 24/7 Wall St.

Economists warn that rising federal debt is reaching historic levels despite a growing economy.

DeQuadros, Head of Economics at Citi Wealth, said the U.S. debt-to-GDP ratio has climbed to levels comparable to those seen during World War II, while the economy posted 2.1 percent real GDP growth in the first quarter of 2026.

He also noted that the spread between the 10-year and two-year U.S. Treasury yields narrowed from 0.74 percentage point to 0.36 percentage point, suggesting bond investors are increasingly pricing in slower economic growth despite continued strength in the labor market.

With the 10-year Treasury yield at 4.48 percent and core inflation remaining elevated, DeQuadros said refinancing the growing national debt will continue to increase government interest costs while leaving the Federal Reserve with limited room to lower interest rates.

As of July 6, 2026, total U.S. public debt stood at approximately $39.39 trillion. According to the report, the debt has increased by about $3.17 trillion over the past year.

"We have debt as a share of GDP... you'd have to go back to World War II to see levels similar to what we're seeing now," DeQuadros said. "We have very large deficits in an economy that is in good shape."